DEBT BOMB

 

Debt Bomb occurs when a major financial institution,

such as a multinational bank, 

 

defaults on its obligations that causes disruption not only in the financial system 

of the institution's home country,

 

but also in the global financial system as a whole.

 

A debt bomb can occur also if consumer spending is based heavily on debt. For example, if a nation incurred huge credit card debt, individual debt holders could default in mass and create trouble for creditors.