Crash Of 2008 Essay

The Crash of 2008, also known as The 2008 Financial Crisis or the Global Financial Crisis, is the United States financial recession, started in December 2007 and ended in June 2009. It is considered as the worst financial crisis since the Great Depression in 1929 (Financial crisis of 2007-2008, 2018). The Crash was caused by some main factors such as deregulation, carelessness of financial institutes and investors, the out-of-control growth of subprime loans and mortgages, securitization (What Caused the 2008 Global Financial Crisis, 2018). It brought a lot of negative impacts to the United States’ economy and the world’s economy. Many countries were affected, billion people lost jobs and money, led to the drop of global’s productivity. In

That was when the “greed” and “carelessness” of financial institutes and investors rose. They did everything to gain benefit for themselves, some did not even care about the future consequences. Example of that was banks. At that time, banks decided to give out loans for everyone without qualification to make more profit. They encouraged everyone, including people with bad credit, or even those who did not have the ability to repay. Every time a person made a loan, banks would give them a mortgage and made interest out of that. The more mortgages they gave out, the more interest they would make. This plan turned out to be a very careless decision of banks. Whenever the bank gave out loan, they gave out a sum of money. For people who were not able to make payment or bad-credit people, although at first the loan helped them to afford the product they wanted to own, but later they got stuck with the high interest the banks gave out. They found themselves unable to keep up with the interest, so they stopped paying, left the banks with the loss of large sum of money. This lasted for a while and banks realized themselves were going bankrupt (Financial Crisis & Recessions,