What Will the Next Financial Crisis Look Like?

Traders on the floor of the New York Stock exchange in this file photo. How will markets react to the next financial crisis. Spencer Platt/Getty Images

With the 10th anniversary of the Lehman Brothers bankruptcy having just passed and the recent stock market drop, the fear of a new financial crisis is palpable.

And those fears are justified. The question is not whether there will be a crisis, but when? In the past 50 years, we have seen more than eight global crises and many more local ones, so the likelihood of another one is quite high. Not just because of the years passed since the 2007 crisis, but because the factors that typically lead to a global crisis are all lining up.

What Leads to a Financial Crisis?

There are primarily three factors.