The Global Financial Crisis Of The United States

1932 Words8 Pages
The last decade has been a period of much economic reform for individuals, institutions and societies alike. With increasing rates of globalization, financial markets and foreign trade have been a direct beneficiary of the free market, thus resulting in an interlinked and a rather interdependent global economy. Despite this advantage, the opportunity for failure loomed as human error and ill-conceived economic regulations became more frequent in some of the world 's most sophisticated economies. This loophole in the global economy resulted in the greatest economic downfall of the modern era since the Great Depression of the 1930’s, the 2008 Global Financial Crisis (GFC). Foster (2010, p.54) defines the financial collapse as a “crisis that started in the US mortgage market when massive numbers of mortgage defaults threatened the ability of the United States and global financial institutions to service their debts. Their consequent inability to lend led to a recession in the United States and many other countries, and increased the likelihood of a meltdown of the global financial system”. Despite the rarity of financial crises, they are considered cyclical, mirroring the trends of a business cycle, thus are able to reoccur if wrong financial regulations are implemented and lack of control is exercised on economic activity. As many economists today examine the crisis, it is widely concluded that there were collective causes and effects, both immediate and longstanding, of the
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