1Introduction fiscal crises have intervened the operation of financial markets over courses. almost observably the great depression in 1929-30, the 1970s pompousness crises and the banking crises in the 1990s created havoc in the financial markets causation toilsome disruption. The current financial crisis which emerged in 2007, although the roots were sow more than earlier, has been one of the toughest and probably the biggest that financial markets have eer encountered. Referred to as the credit crunch, the impact of the crisis has not only been on the banking area but on the real economy as a whole potentially leading to long and mysterious recession. 2Causes of the Financial CrisisNumerous accounts have been made to explain the causes of this great financial disaster. at that place are a number of heighten factors that has resulted in the outbreak of this financial crisis of enormous proportions. Collapse of the US accommodate market, passing leveraged financial tr ansactions and a humiliated avocation array encouraging borrowings, among others, have all contributed to the downturn in the world-wide financial market. Let us now air at these various causes in greater detail. 2.1Low Interest RatesFollowing the crack of the compass point com bubble and the possibility of recession looming the US government started cut down the interest grazes to boost up the economy.
The interest rate became as low as 1.5 percent in June 2003 which was at its lowest level since 1958 (PSB, 2007). This low interest rate implant its takers in the form of home buyers and borrowers with the housing market finally showing some growth! subsequently years of declining trend. In fact the rate of a 30 year better rate mortgage in the year 2003 was the lowest in forty years and so the day-dream of owning a menage in US was becoming a very well-to-do reality for a... If you want to get a full essay, methodicalness it on our website:
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