The Origin of Financial Crises by George Cooper: 9780307473455 | PenguinRandomHouse.com: Books (2024)

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What is the origin of the financial crisis? ›

It started with a subprime mortgage lending crisis in 2007 and expanded into a global banking crisis with the failure of investment bank Lehman Brothers in September 2008. Huge bailouts and other measures meant to limit the spread of the damage failed and the global economy fell into recession.

The Great Depression of 1929–39

Encyclopædia Britannica, Inc. This was the worst financial and economic disaster of the 20th century. Many believe that the Great Depression was triggered by the Wall Street crash of 1929 and later exacerbated by the poor policy decisions of the U.S. government.

It threatened to destroy the international financial system; caused the failure (or near-failure) of several major investment and commercial banks, mortgage lenders, insurance companies, and savings and loan associations; and precipitated the Great Recession (2007–09), the worst economic downturn since the Great ...

A financial crisis in 33 A.D. caused by a contraction of money supply had been recorded by several Roman historians. Among the earliest crises Reinhart and Rogoff study is the 1340 default of England, due to setbacks in its war with France (the Hundred Years' War; see details).

The catalysts for the GFC were falling US house prices and a rising number of borrowers unable to repay their loans. House prices in the United States peaked around mid 2006, coinciding with a rapidly rising supply of newly built houses in some areas.

The analysis shows that the financial crisis was caused by a large reduction in mortgage lending standards which was primarily due to Congresses' mandate to increase homeownership. The paper provides evidence that the financial crisis was abating by January 2009 and ended when the recession ended in June 2009.

These crisis episodes include: The Big Five Crises: Spain (1977), Norway (1987), Finland (1991), Sweden (1991) and Japan (1992), where the starting year is in parenthesis. (1973, 1991, 1995), and United States (1984).

It has been marked by hyperinflation, escalating starvation, disease, crime and mortality rates, resulting in massive emigration from the country. The situation is believed to be by far the worst economic crisis in Venezuela's history, and is also the worst facing a country in peacetime since the mid-20th century.

Many economists, including Federal Open Market Committee (FOMC) members, anticipate a soft landing for the U.S. economy in 2024 that includes slowing GDP growth but no recession.

What triggered the Great Depression? ›

Among the suggested causes of the Great Depression are: the stock market crash of 1929; the collapse of world trade due to the Smoot-Hawley Tariff; government policies; bank failures and panics; and the collapse of the money supply.

The Carnegie Endowment for International Peace reports in its International Economics Bulletin that Ukraine, as well as Argentina and Jamaica, were the countries most deeply affected by the crisis.

The Great Recession: December 2007–June 2009

Reasons and causes: The nationwide downturn in U.S. housing prices triggered a global financial crisis, a bear market in stocks that had the S&P 500 down 57% at the lows, and the worst economic downturn since the recession of 1937-38.

1929–1941. The longest and deepest downturn in the history of the United States and the modern industrial economy lasted more than a decade, beginning in 1929 and ending during World War II in 1941. “Regarding the Great Depression, … we did it.

Major government players in the 2008 financial crisis included Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and President George W. Bush.

The root cause was excessive mortgage lending to borrowers who normally would not qualify for a home loan, which greatly increased risk to the lender. Lenders were willing to take this risk, as they could simply package the loans into an instrument they sold, passing the risk on to investors.

The emergence of sub-prime loan losses in 2007 began the crisis and exposed other risky loans and over-inflated asset prices. With loan losses mounting and the fall of Lehman Brothers on September 15, 2008, a major panic broke out on the inter-bank loan market.

Etymology. The English word crisis was borrowed from the Latin, which in turn was borrowed from the Greek κρίσις krisis 'discrimination, decision, crisis'. The noun is derived from the verb κρίνω krinō, which means 'distinguish, choose, decide'.

The debt crisis that erupted in the second half of 1982 was the result of several interrelated developments in the 1970s and early 1980s: adverse developments in the world economy, inappropriate economic policies in many developing countries, and sharp swings in the availability of external financing, particularly bank ...