Financial panics and crises

In this semester, I would like to conduct a research study on financial panics and crisis. I choose this topic because although I am familiar with financial crisis, the concept of panic is a bit strange for me. I feel really curious about it and want to find the relationship between panics and crisis.

Financial crisis usually means a variety of situations in which some financial assets suddenly lose a large part of their nominal value (Haidar, Jamal Ibrahim, 2009). The form of financial crisis is used to describe different types of crisis across financial sector all over the world. Due to the liquidity of the financial assets, the financial crisis can start in any single country and spread to the worldwide.

Financial Panics, events during which bank depositors attempt to withdraw their deposits, equity holders sell stock, and market participants in general seek to liquefy their assets (http://www.answers.com/topic/financial-panic). It can lead to or deteriorate financial crisis. As I see, it can be also used to describe a phenomenon during the financial crisis, in which a lot of creditors withdraw their fund from the debtors, even though the debtors still have the ability to refund. 

Financial panics and crisis are firmly connected. They also follow each other or happen at the same time.

Now I am reading a book about the Panic of 1907, as I want to see closely to financial panics' effects. And in next a few weeks I will talk about this great panic.

References

Haidar, Jamal Ibrahim, 2009. "The mark-to market valuation and executive pay package regulations within the 2009 US (Bailout) Emergency Economic Stabilization Act", Journal of Economic Policy Reform, Taylor and Francis, vol. 12(3), pages 189-199, September

http://www.answers.com/topic/financial-panics#ixzz2KVwmrtIe