Financial Crisis (2007-2008)

The 2007-2008 financial crisis was a major economic downturn caused by the collapse of the housing bubble in the United States. Banks had excessively lent money to people buying homes, often with risky loans. When house prices fell, many homeowners couldn't pay their mortgages, leading to huge losses for banks and investors. This eroded confidence in financial institutions, causing credit to freeze and resulting in a widespread recession. The crisis highlighted vulnerabilities in the financial system and led to significant government interventions to stabilize markets and prevent a deeper collapse.