History Of The Financial Crisis During The Great...

HISTORY OF THE FINANCIAL CRISIS There have been many accounts on what the financial crisis was and how it started with different people giving different opinions on what caused the crisis. According to the IMF (international Monterey Fund), it is said to be the worst financial crisis since the Great depression of the 1930’s. The first claims that the chief root was government involvement in the housing market, this contribution is said to have overvalued a housing bubble and resulted in the crisis. Another attributes the financial crisis to greedy wall street bankers who intentionally influenced the financial market to take advantage of homeowners and mortgagers, deliberately making the financial system vulnerable for their personal satisfaction. A third account underlines both global economic forces and failures in U.S. policy and supervision. This account states that a high influx of money into the economy caused bankers to look for resourceful ways to make profit. This resulted in the inflation of housing prices with the hopes of reselling at a higher price between 6 months to two years. Banks also introduced an adjustable rate mortgage (sub-prime mortgages) which allowed borrowers to vary their monthly payments. That meant the overall principal grows over time, compared to normal mortgages where the balance owed reduced over 30 years to zero and the debtor owns the house and is not obliged to make any more payments. If the price of houses kept going up and the debtorShow MoreRelatedThe Great Depression Of The 1930 S1476 Words   |  6 Pagesthe great depression of the 1930’s and the great recession in the United State of America. First, I’ll make a general overview of each of these two different periods and then focus on certain specific aspects during these different times. This will include the causes to the economic recessions witnessed, impacts of the economic recessions and the solutions that were introduced. 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