ipl-logo

Why The 2008 Financial Crisis Caused The Global Recession

162 Words1 Pages
To begin with, the most recent economic crisis happened in 2008, which led to the global recession. It was a banking crisis also known as a credit crunch, which has several reasons why it appeared in the economy. Firstly, the US economy experienced a housing boom, when low-income earners started purchasing new private properties by taking a mortgage loan from US banks without being able to repay their borrowing in the long term. Secondly, due to other economic factors such as inflation, the cost of mortgage increased and became less affordable for consumers. As the demand for houses shrunk, the housing boom ended and it led to the fall in house prices. That is why, when house owners failed to pay a debt, banks could not secure their lending,

More about Why The 2008 Financial Crisis Caused The Global Recession

Open Document