Economic Crisis of 2008

The Economic Crisis of 2008, often called the Great Recession, stemmed from a housing bubble in the United States. Many people took out risky mortgages they couldn’t afford, and banks bundled these loans into complex securities. When housing prices fell, defaults surged, leading to significant losses for financial institutions. This caused a credit freeze, where banks stopped lending, leading to layoffs and business failures. The crisis spread globally, resulting in severe economic downturns, massive government bailouts, and reform in financial regulations to prevent future occurrences. It highlighted vulnerabilities in the financial system and the need for better oversight.