Factors That Influenced the Global Financial Crisis of 2008

Since the years of the great depression in the 1930s, the global financial crisis of 2008 is arguably the worst to have hit the world. The crisis began with the escalation of prices in the property market creating a liquidity crisis. It had massive consequences in varying sectors of the economy. The financial, property and mortgage sectors were hit hard by the crisis. Large financial institutions collapsed while stock markets experienced downturns. The period was characterized by government bailout stimulus packages to collapsed institutions and the financially ailing sectors of the economy. Various arguments have been mooted as the causes that led to the escalation of the crisis that threatened to tear down the global economy. This paper looks at some of these factors and their influences on the crisis.
The mortgage originators could in fact be considered as the original creators or stimulators of the chain reaction and complex interplay that led to the crisis. Privatization of the government chartered and sponsored mortgage enterprises led to the creation of a liquid secondary mar...