Cause Of The 2008 Financial Crisis

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Causes of the 2008 financial crisis
Financial crisis has been prevalent since time immemorial. The world’s economies have been continually hit by the same and the 2008 financial crisis is definitely not the last appearance. The financial sector involves complexity and contains one of the world’s largest players and has continually developed into large conglomerates sometimes too big to control. These financial organizations have developed products that have become hard to regulate and impose control on which has often led to their collapse. Major world governments and financial institutions, mostly the central banks have the responsibility to make sure that these organizations are operating both ethically and legally and within the bounds of the law. This is the institution of supervisory and regulatory roles to monitor them.
Supervisory and regulatory structures have in the past failed to control the activities of these enormous companies dealing in financial solutions especially where these organizations have become larger than the country’s individual economies. The financial companies engage in risks too large for them to handle in a bid to generate more profits and when these ventures have gone haywire, these companies have sunk.
Foster & Magdoff (2009) wrote that the failure of the international financial markets in 2008 led to the World’s worst economic nightmare, with a dip in the market performance that led to the eventual failure of companies operating therein.
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