2007-2008 financial crisis

The 2007-2008 financial crisis was caused by the collapse of the housing bubble in the U.S. When housing prices fell, many homeowners defaulted on loans, leading banks to suffer huge losses. Financial institutions had bundled these risky loans into complex investments, spreading the danger throughout the global financial system. As confidence eroded, banks tightened lending, causing credit to freeze. This led to widespread bankruptcies, job losses, and economic downturn worldwide. The crisis highlighted risks in financial markets, prompting government interventions and reforms to restore stability and prevent similar events.