The global financial crisis of late 2021-08, otherwise known as the global financial crisis, has been a serious global economic crisis. Many economists considered it to be the worst financial crisis since the Great Depression, and many governments passed significant laws to help offset the impact of the crisis on the global economy. Global economic analysts expect the recession to continue, and experts believe that the recession will last much longer than other similar periods in history, perhaps even causing a new global financial crisis. There are many theories on what caused the global financial crisis and the recession, and while some researchers point to the workings of free trade, others blame greedy bankers and corporations, arguing that they allowed businesses to use their wealth and market position to manipulate the housing market in order to increase their own wealth at the expense of ordinary citizens.
The cause of this global financial crisis is still largely a mystery to economists, and most agree that it is still ongoing. One thing is certain, however: the crisis has crippled the American economy and has led many ordinary citizens to fall behind on their mortgages and lose their homes. While analysts debate the exact causes of the crisis, there is little doubt that it is the result of a widening hole in the middle class. The resulting global financial crisis spawned unprecedented levels of debt, and left ordinary Americans with no viable method of recovering from the crisis. As millions of people watched their savings account values decline, they began to ask questions about how banks and lenders could get their money back.
In response, the U.S. government stepped in with financial stimulus programs that are designed to help support the economy. In addition to financial assistance, there are several changes to lending standards that can also help stabilize the economy. The biggest of these changes, of course, are the bailouts for financial institutions. The bailout programs offered to financial institutions were a significant contributing factor to the global financial crisis. Because these institutions received generous bailouts from the government, they were able to retain operating at more than normal. This is beneficial to the average consumer, since most credit cards and other types of lending are now being limited or eliminated altogether.
Another significant change to the global financial markets has come about because of the CFTC. The Commodity Futures Trading Commission was established by the CFTC to protect the interest of both the consumer and the financial industry. Because the CFTC plays such an important role in the global financial crisis, many argue that the agency has not done enough to help stabilize the economy. The CFTC can mandate minimum closing ratios for various financial institutions, and can freeze interest rates. These moves, however, have often resulted in higher interest rates for consumers overall, as some feel that the agency has been too aggressive in its attempts to stabilize the credit market.
Beyond governmental intervention, there are three major factors that can be considered to be a potential cause of the global financial crisis. The first is a collision between two world-powers, namely the United States and Russia. The economic impact of these collisions could be felt throughout the globe, resulting in a variety of effects including the recent outbreak of swine flu. Another potential factor comes from the political fallout caused by the crises. Many citizens across the globe became polarized between their support for specific political entities, such as Syria’s autocratic government or Iran’s revolutionary government. In the end, support for one or the other became so extreme that countries had to resort to direct military intervention to stem the tide.
One of the biggest threats facing the global financial crisis currently comes from the subprime mortgage fiasco. The main reason why subprime mortgages experienced such incredible growth in the first place is due to lax lending standards that allowed homebuyers to purchase properties based on significantly inflated prices. When the bubble burst, many mortgage companies found themselves struggling to contain the damage. Subprime mortgage lenders, which are primarily located in areas with high unemployment and poverty rates, were nearly shut down as a result of the losses they took on when homebuyers suddenly had little to choose from due to these poor lending standards. As a result, these troubled financial institutions received a significant amount of federal bailout money, allowing them to slowly but surely recover from the crisis over the course of the past year.