CURRENT AFFAIRS

Detailed explanation-1: -Turbulence in global financial markets Stock markets have declined over 30%; implied volatilities of equities and oil have spiked to crisis levels; and credit spreads on non-investment grade debt have widened sharply as investors reduce risks (Figure 1).

Detailed explanation-2: -The Covid-19 has crisis raised both short- and long-term challenges for the insurance sector. Insurance companies were facing operational and procedural challenges, dips in revenue and depleting reserves as well as the mandate to meet the growing coverage requirements faced by the entire country.

Detailed explanation-3: -It began with the housing market bubble, created by an overwhelming load of mortgage-backed securities that bundled high-risk loans. Reckless lending led to unprecedented numbers of loans in default; bundled together, the losses led many financial institutions to fail and require a governmental bailout.

Detailed explanation-4: -It is decentralized in a sense that no one single authority, such as an international agency or government, controls it. The major players in the market are governments (usually through their central banks) and commercial banks.