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The 2007–2008 financial crisis, or the global financial crisis (GFC), was the most severe worldwide economic crisis since the Great Depression.
- Sowing The Seeds of The Crisis
- Signs of Trouble
- August 2007: The Dominoes Start to Fall
- March 2008: The Demise of Bear Stearns
- September 2008: The Fall of Lehman Brothers
- The Aftermath
- About Dodd-Frank
- The Bottom Line
The seeds of the financial crisis were planted during years of historically low interest rates and loose lending standards that fueled a housing price bubble in the U.S. and elsewhere. It began, as usual, with good intentions. Faced with the bursting of the dot-com bubble, a series of corporate accounting scandals, and the September 11 terrorist at...
Interest rates eventually started to rise and the housing market reached a saturation point. The Fed started raising rates in June 2004 and the federal funds rate reached 5.25% two years later, where it remained until August 2007. There were early signs of distress. U.S. homeownership had peaked at 69.2% by 2004.Then home prices started to fall in ...
It became apparent by August 2007 that the financial markets couldn't solve its subprime crisis and that the problems it caused were reverberating well beyond the U.S. borders. The interbank marketthat keeps money flowing around the globe froze completely, largely due to fear of the unknown. Northern Rock had to approach the Bank of England for eme...
The U.S. economy was in a full-blown recession by the winter of 2008. Stock markets around the world were tumbling more than they had since the September 11, 2001, terrorist attacks. The Fed cut its benchmark rate by three-quarters of a percentage point in January 2008. This was its biggest cut in a quarter-century as it sought to slow the economic...
The carnage was spreading across the financial sector by the summer of 2008. IndyMac Bank became one of the largest banks ever to fail in the U.S.The country's two biggest home lenders, Fannie Mae and Freddie Mac, had been seized by the U.S. government. The collapse of the venerable Wall Street bank Lehman Brothers in September marked the largest b...
The Wall Street bailout package was approved in the first week of October 2008. The package included many measures, such as a huge government purchase of "toxic assets," an enormous investment in bank stock shares, and financial lifelines for Fannie Mae and Freddie Mac. Public indignation was widespread. It appeared that bankers were being rewarded...
The most ambitious and controversial attempt to prevent such an event from happening again was the Dodd-FrankWall Street Reform and Consumer Protection Act in 2010. The act restricted some of the riskier activities of the biggest banks, increased government oversight of their activities, and forced them to maintain larger cash reserves. It attempte...
Bubbles occur continuously in the financial world. The price of a stock or any other commodity can become inflated beyond its intrinsic value. The damage is usually limited to losses for a few over-enthusiastic buyers. The financial crisis of 2007–2008 was a different kind of bubble, however. Like only a few others in history, it grew big enough th...
- 2 min
Dec 18, 2023 · The Great Recession was the severe economic downturn from 2007 to 2009 triggered by the collapse of the U.S. housing bubble and the global financial crisis. Learn about the factors that led to the recession, its impact on the economy and the policy actions taken to recover from it.
Sep 14, 2018 · Learn how the U.S. housing market, low interest rates, deregulation and global interdependence led to the worst economic crisis since the Great Depression. Explore the warning signs, the collapse of Lehman Brothers and the impact on the world economy.
- Eric Rauchway
- 3 min
Jul 17, 2018 · What really went wrong in the 2008 financial crisis? Martin Wolf on how the crisis marked the end of a consensus for liberalisation. Ben Bernanke (centre), then chairman of the Federal Reserve,...
Jun 6, 2024 · The 2008 financial crisis was caused by a confluence of issues within the finance industry and the broader economy. The financial crisis was primarily caused by deregulation in the financial industry that permitted banks to engage in hedge fund trading with derivatives.
Sep 13, 2018 · A decade after the collapse of Lehman Brothers, economist Adam Tooze explains how the crisis spread globally and its impact on income, wealth, and politics. He also discusses the role of the Fed, the bailouts, and the unconventional policies that saved the system.
