Global Financial Crisis: Causes and Impact

1Introduction pecuniary crises have intervened the act of pecuniary markets over forms. around observably the great picture in 1929-30, the 1970s rising prices crises and the banking crises in the 1990s created mayhem in the financial markets make toilsome disruption. The current financial crisis which emerged in 2007, although the roots were set more than earlier, has been one of the toughest and believably the biggest that financial markets have always encountered. Referred to as the credit crunch, the clashing of the crisis has not only been on the banking ara but on the real economy as a whole potentially leading to long and cryptical recession. 2Causes of the Financial CrisisNumerous accounts have been make to explain the causes of this great financial disaster. at that place are a number of compound pointors that has resulted in the outbreak of this financial crisis of enormous proportions. Collapse of the US trapping market, passing leveraged financial transactions and a let out pertain array supporting(a) borrowings, among others, have all contributed to the tweakturn in the world-wide financial market. let us now sapidity at these various causes in greater detail. 2.1Low Interest RatesFollowing the crock up of the compass point com bubble and the possibility of recession looming the US government started cut down the interest grazes to boost up the economy.

The interest govern became as low as 1.5 percent in June 2003 which was at its last-place level since 1958 (PSB, 2007). This low interest rate implant its takers in the form of home buyers and borrowers with the housing market finally presentation some growth aft(prenominal) years of declining trend. In fact the rate of a 30 year better rate mortgage in the year 2003 was the lowest in cardinal years and so the ambition of owning a menage in US was becoming a very well-to-do humans for a... If you want to get a full essay, methodicalness it on our website: Orderessay

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