Financial crisis of 2008
from class: Principles of Finance Definition The financial crisis of 2008 was a severe worldwide economic downturn triggered by the collapse of the housing bubble in the United States. It led to massive bank failures, significant declines in consumer wealth, and prolonged unemployment.
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Predict what's on your test 5 Must Know Facts For Your Next Test The crisis was primarily caused by high-risk mortgage lending practices and complex financial products like mortgage-backed securities. Major financial institutions such as Lehman Brothers went bankrupt, intensifying the crisis. The U.S. government responded with bailouts, such as the Troubled Asset Relief Program (TARP), to stabilize the economy. The crisis resulted in widespread foreclosures and significant declines in home values across the country. Regulatory reforms, including the Dodd-Frank Act, were implemented to prevent a similar future crisis. Review Questions What were some of the primary causes of the 2008 financial crisis? How did the U.S. government respond to stabilize the economy during the financial crisis of 2008? What regulatory measures were introduced following the 2008 financial crisis? "Financial crisis of 2008" also found in:
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