Short answers, pulled from the story.
A financial crisis is a situation in which financial assets suddenly lose a large part of their nominal value. Common causes include the bursting of speculative bubbles, bank runs triggered by fractional-reserve banking, currency devaluations, sovereign defaults, excessive leverage, and asset-liability mismatches in financial institutions.
A banking crisis occurs when widespread bank runs render institutions insolvent, as happened in the run on the Bank of the United States in 1931 and the run on Northern Rock in 2007. A currency crisis, also called a devaluation crisis, occurs when a pegged exchange rate fails, typically defined as a nominal depreciation of at least 25% or a weighted depreciation exceeding the mean by more than three standard deviations.
Well-known examples include the 17th-century Dutch tulip mania, the South Sea Bubble of 1720 in Great Britain, the Wall Street crash of 1929, the Japanese property bubble of the 1980s, and the collapse of the United States housing bubble during 2006-2008. The dot-com bubble that burst in 2001 is also frequently cited as an example of irrational exuberance about a new technology.
Hyman Minsky argued that financial fragility is a typical feature of capitalist economies, not an exception. He described three financing types: hedge finance, where income covers principal and interest; speculative finance, where income covers only interest; and Ponzi finance, where income cannot even cover interest and the firm must borrow more or sell assets. During economic expansions, firms progressively shift toward Ponzi finance, accumulating fragility until a large default triggers a broader crisis.
Economists Carmen Reinhart and Kenneth Rogoff traced financial crises back to sovereign defaults before the 18th century, beginning their eight-century survey in 1258. The Financial Crisis of 33 AD, caused by a contraction of money supply, was recorded by several Roman historians, and Reinhart and Rogoff also noted currency debasement under the Roman and Byzantine empires.
Financial crises spread through a process economists call contagion. When one institution fails, it may be unable to honor payments to other firms, transmitting distress through the system. The Thai crisis of 1997 spread to South Korea and other Asian economies in a widely cited example. When the failure of one institution threatens many others, this is called systemic risk, and it is the primary reason regulators seek to prevent large financial institutions from collapsing.