Getting to Normal
In both the US subprime crisis and Europe's sovereign-debt crisis, assets previously regarded as risk-free proved to be anything but safe. Recovery for Europe, however, is likely to be much slower than it has been for the US, owing to the absence of debt mutualization and continued uncertainty about default risk.
https://prosyn.org/7U6e1LC
BRUSSELS – A financial crisis erupts when a large volume of assets in the financial system suddenly appears to be risky and investors want to get rid of their holdings. These assets become “toxic” – not simply risky, but carrying a risk that cannot be quantified. Toxic assets are not traded according to a normal risk-return calculus. Given that their risk cannot be calculated, their owners just want to sell them – sometimes at any price.