Financial crisis can refer to any significant economic instability due to inflation, foreign currency fluctuations, bank panics, stock market crashes, or government defaults on debt.
The financial crisis of 2007-2010 refers to the widespread failure of banks and banking systems worldwide during the recession that started in the United States in the Fall of 2007. The financial crisis was precipitated by escalating defaults in United States sub-prime mortages that collateralized financial securities. The escalating defaults let to dramatic declines in the value of the securities backed by the sub-prime mortgages — eventually resulting in bank insolvencies around the globe. Where there were not outright bankruptcies, concern regarding the financial condition of financial institutions led bank depositors to withdrew money at a pace that could not be covered by cash reserves.