What caused the global financial crisis of 2008?

What caused the global financial crisis of 2008?

The 2008 global financial crisis was primarily caused by the collapse of the housing bubble in the United States.

What role did banks play in this crisis?

Banks engaged in risky lending practices, offering subprime mortgages and creating complex financial products that amplified the crisis.

How did the crisis affect the global economy?

The crisis led to severe recessions in many countries, massive unemployment, and a loss of consumer confidence worldwide.

What measures were taken to prevent future crises?

Regulatory reforms like the Dodd-Frank Act were implemented to increase oversight of financial institutions and reduce risk.

Can you explain the term 'too big to fail'?

'Too big to fail' refers to financial institutions whose failure would be catastrophic to the economy, leading to government bailouts.