The Global Financial Crisis During The Great Depression Of The 1930s

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“THE GLOBAL FINANCIAL CRISIS” A financial crisis is a situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated with a panic or a run on the banks, in which investors sell off assets or withdraw money from savings accounts with the expectation that the value of those assets will drop if they remain at a financial institution. Contents:  Introduction  Causes of the Crisis  Impact of financial crisis  Solution of financial crisis Introduction: The financial crisis of 2007–08, also known as the “global financial crisis” and the 2008 financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s. It threatened the collapse of large financial institutions, which was prevented by the bailout of banks by national governments, but stock markets still dropped worldwide. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. Background: On February 7, 2007 one of the world’s largest banks, HSBC, announced losses related to U.S. subprime mortgage loans. A couple of months later, on April 3, New Century Financial, a subprime specialist, Bear Stearns told an incredulous financial community that two of its hedge funds suffered large losses related to subprime mortgages. Other Wall Street standard-bearers also started reeling from bad investments, Before the end of August the
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