2008+Financial+Crisis

To read more about big events in the American economy,
 * **see Economics 5.3**
 * **to read more about the impact of financial institutions in American history, see Economics 6.3.**

The 2008 Financial Crisis has been called by economists as the worst depression since the Great Depression in the 1930s. The crisis resulted in numerous consequences such as bursting of the housing bubble leading to evictions and foreclosures, prolonged unemployment, the closing of small businesses and banks, and threatened the collapse of financial institutions like big banks. The crisis not only affected the United States, but was also felt throughout the global world. Ben Berknanke: Why the 2008 Crisis was worse than the Great Depression, from Forbes.

From the Guardian, the key stages of the global financial crisis. This article explains how the crisis was felt on a global level.

Click here to read about the collapse of Iceland as a result of the 2008 global crisis.

This site has great resources that show how the rest of the world was affected by the financial crisis, and why a break in the American system led to a break in the global system.

How Will the 2008 Crisis Affected the Developing World.

Countries in Official Recession (two consecutive quarters)  Countries in Official Recession (one quarter) Countries with Economic Slowdown of More Than 1.0%  Countries with Economic Slowdown of More Than 0.5%   Countries with Economic Slowdown of more Than 0.1% Countries with Economic Acceleration

Causes
Economists offer numerous reasons for the crisis. The immediate cause was the burst of the housing bubble. However, there are several causes that led to this point. Some proposed causes are risky lending and investments by banks, the rapid growth of the housing bubble, and government deregulation.

From the Economist, the causes of the Financial Crisis. The Causes and Effects of the 2008 Financial Crisis Money, Power and Wall Street from Frontline. Click here for interviews with the main players of the crisis where they explain what happened from their perspective.

From Forbes, Lest We Forget: Why We Had a Financial Crisis.

How Debt Caused the 2008 Financial Crisis and Why It Matters.

The Crisis shown in cartoons

Governmental Response
The US government responded by providing bailout to big banks and businesses, as a short-term fix, and implemented regulatory proposals, as a long-term fix.

From the Washington Post, the bank's bailouts worked.

From the US Treasury, The Financial Crisis Five Years Later: Response, Reform, and Progress in Charts. From Frontline, a continuation of Money, Power, and Wallstreet: The Untouchables. This documentary explains why few of the Wall Street Executives involved in the financial cirsis were prosecuted for their actions.

From USA Today, Could the 2008 Financial Crisis Happen Again? Five Year Later