panic investment & finance definition

A widespread and significant fear that the market or economy is going to collapse. A panic leads to massive bank deposit withdrawals and possible banking collapses, as well as falling stock prices. Panics occurred at the height of the Great Depression in the U.S. when bank depositors by the hundreds descended on their banks to withdraw their deposits for fear that the bank would fail and they would lose all of their money. A panic is usually a relatively short-lived phenomenon, in contrast to a recession or depression, which last six months to several years.