Causes of the 2008 Financial Crisis
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Causes of the 2008 Financial Crisis
a) Financial crisis definition Financial crisis is defined as the financial meltdown, or in other terms as the credit crunch. A financial crisis is an economic incidence makes it hard to obtain and access the capital for use in investment. The economic crisis is an ongoing economic problem that was more pronounced in 2008 resulting in the liquidity in the global credit markets and its financial systems (Berlatsky 77). This means that there was no credit available for the investors, which adversely affects the poor countries. For the developed countries, this crisis created panic and was perceived as the most horrible in the previous years. It was equated to the 1930 depression of the economy. In addition, to understand the causes of the financial crisis in 2008, it is crucial to know that it is a representation of the fall of the interlocking set of the organization, governing the economy since the 1980s. The financial crisis has numerous dimensions (Wallison 31). For example, the build of debt, signified by the household and corporate debts, but majorly the household debt played the major role. Furthermore, the possibility of recurrence of the international monetary instabilities and the global refusal to fund the US and the UK economic crisis is one of the dimensions of the financial crisis. The third factor that can affect the economy is the ecological crisis, which brings the possibility of the prospects of a stop to the decline in the prices on goods and services, which can be seen as the medium term development and the determination of the underlying tensions requiring immediate changes (Gup, 2010). It is important to define the competing strategies of capital for investments in the attempt to manage the crisis.
b) Past financial crisis
I) Worst Economic Slowdowns in History
The end of the First World War ushered in the beginning of a new era in the history
Professor's Name
Course Title
Date of Submission
Causes of the 2008 Financial Crisis
a) Financial crisis definition Financial crisis is defined as the financial meltdown, or in other terms as the credit crunch. A financial crisis is an economic incidence makes it hard to obtain and access the capital for use in investment. The economic crisis is an ongoing economic problem that was more pronounced in 2008 resulting in the liquidity in the global credit markets and its financial systems (Berlatsky 77). This means that there was no credit available for the investors, which adversely affects the poor countries. For the developed countries, this crisis created panic and was perceived as the most horrible in the previous years. It was equated to the 1930 depression of the economy. In addition, to understand the causes of the financial crisis in 2008, it is crucial to know that it is a representation of the fall of the interlocking set of the organization, governing the economy since the 1980s. The financial crisis has numerous dimensions (Wallison 31). For example, the build of debt, signified by the household and corporate debts, but majorly the household debt played the major role. Furthermore, the possibility of recurrence of the international monetary instabilities and the global refusal to fund the US and the UK economic crisis is one of the dimensions of the financial crisis. The third factor that can affect the economy is the ecological crisis, which brings the possibility of the prospects of a stop to the decline in the prices on goods and services, which can be seen as the medium term development and the determination of the underlying tensions requiring immediate changes (Gup, 2010). It is important to define the competing strategies of capital for investments in the attempt to manage the crisis.
b) Past financial crisis
I) Worst Economic Slowdowns in History
The end of the First World War ushered in the beginning of a new era in the history
Cited: Berlatsky, Noah. The global financial crisis. Detroit, MI: Greenhaven Press/Gale Cengage Learning, 2010 Cline, William R. Financial globalization, economic growth, and the crisis of 2007-09. Washington: Peterson Institute for International Economics, 2010 Dalton, John M. How the stock market works. 3rd ed. New York: New York Institute of Finance, 2011 Darity, William A. International encyclopedia of the social sciences. 2nd ed. Detroit, Mich.: Macmillan Reference USA, 2008 Gup, Benton E. The financial and economic crises: an international perspective. Cheltenham: Edward Elgar, 2010 Kolb, Robert W. The financial crisis of our time. New York: Oxford University Press, 2011. Suter, Christian Wallison, Peter J. Dissent from the majority report of the Financial Crisis Inquiry Commission. Washington, DC: American Enterprise Institute, 2011.