## Appendix A Main Stock Market Crises in the 1987-2022 Period  
Although there is no precise definition of a financial crisis, it typically involves a sharp decline in the value of financial assets and a substantial rise in uncertainty and volatility. Historically, bank runs, recessions, stock market crashes, asset bubbles, currency devaluations, and sovereign defaults triggered many financial crises.  
1. **The Black Monday episode (25 August 1987-20 October 1987)**: This severe global stock market crash on 19 October 1987 sparked fears of a global economic crisis. Its causes are primarily endogenous: stock overvaluation, increasing fiscal deficits, dollar weakness, and potential rate hikes. Markets declined globally, beginning with Asia ex-Japan, followed by Europe, the U.S., and finally, Japan. The Dow Jones plummeted by 22.6% with a maximum drawdown of 40.9% lasting 39 days. The index recovered by 24 August 1989.
2. **The Kuwait invasion by Iraq (13 July 1990-11 October 1990)**: The 1990 Iraqi invasion of Kuwait caused a sharp surge in oil prices, impacting stock markets globally. The potential loss of oil supplies sent prices to the peak of USD 46 per barrel in October. The Dow Jones fell by 21.1%. The S&P500 experienced a maximum drawdown of 19.9% lasting 62 days and recovered by 13 February 1991.
3. **The dot-com bubble (10 March 2000-10 October 2002)**: This modern stock bubble, fueled by the rapid growth of internet companies, stemmed from a bubble within the USA technology sector, which was linked to a surge in new IPOs of tech firms and a rapid Internet penetration. The NASDAQ peaked in March 2000 and, subsequently, the index sharply declined, with a maximum drawdown of 78.4% lasting 648 days. It fully recovered by 23 April 2015.
4. **The Great Financial Crisis (11 October 2007-6 March 2009)**: Triggered by aggressive Subprime lending and excessive risk-taking, this severe crisis led to a sharp drop in stock markets. The resulting drop in U.S. real estate prices caused losses in property values, mortgage-backed securities, and related credit derivatives, provoking bankruptcies in financial intermediaries and a sharp drop in stock markets. Following the financial breakout, governments worldwide implemented massive bailouts for financial institutions and expansionary monetary and fiscal policies. The S&P500 experienced a maximum drawdown of 57.6% lasting 352 days and recovered by 11 March 2013, following global financial interventions.
5. **The COVID-19 pandemic and the subsequent crisis (19 February 2020-23 March 2020)**: This crisis, stemming from the global health emergency and lockdowns, caused a sharp global recession and financial market declines. Financial markets suffered sharp declines that threatened global financial stability. Unlike previous ones, this one is linked to exogenous factors, particularly sanitary emergencies and lockdowns that halted economic activity and disrupted global supply chains. The S&P500 index had a maximum drawdown of 35.4% lasting 23 days and recovered by 18 August 2020.
6. **Post-COVID-19 interest rate hikes (4 January 2022-13 October 2022)**: In response to persistent post-COVID inflation, central banks aggressively raised interest rates, leading to significant stock market declines. Major declines in the stock market occurred, bottoming out between late 2022 and early 2023. Inflation peaked in mid-2022, and as rate hikes curbed price pressures, central banks moved to easing monetary policies. The S&P index experienced a maximum drawdown of 27.5% lasting 195 days and fully recovered by 19 January 2024.