According to a top economist, investors should brace themselves for several months of market adjustments due to the looming threat of a “Minsky Moment,” which refers to a sudden decline in asset prices after an accumulation of debt. Ludovic Subran, Chief Economist at Allianz, believes that a financial accident could trigger a global economic disaster. The recent series of bank failures in March has created concern over liquidity markets, and Silvergate Capital, Signature Bank, Silicon Valley Bank, Credit Suisse, and First Republic have all been taken over by their competitors in the last two months. The failures have caused waves across the financial system, which has led to regional lenders nationwide losing their value as depositors panicked. Subran cites the mispricing of corporate-credit risk, the mismanagement of risks, and the sudden shift in central bank monetary policies as responsible for current economic tensions. He believes investors can expect a bumpy ride as these cathartic moments occur more frequently over the next few months. Allianz predicted that the US economy will plummet into a recession in the second half of the year, amidst a report that warns of a credit crunch caused by tightening credit conditions and the banking crisis. If more regional lenders fail, the industry may become even more risk-averse, leading to a pullback in lending and a lack of credit that could stifle spending and investment.