The 2008 financial crisis began with cheap credit and lax lending standards that fueled a housing bubble. Banks were left holding trillions of dollars of worthless investments in subprime mortgages when the bubble burst. The Great Recession that followed cost many their jobs, their savings, and their homes.
What really caused the global financial crisis?
There were three causes of the 2008 financial crisis: deregulation, securitization, and the Fed's poor timing in lowering and raising interest rates.
Why was '08 a global financial crisis?
And this, says Adam Tooze, is the key to understanding the crash of '08, a global financial crisis because of global financial interconnectedness, a crisis that would have been far worse had the U.S. not dispensed dollars worldwide. Wall Street is a global banking center. So you have banks from all over the world.
