the 2008 financial crisis

The 2008 financial crisis was caused by excessive risk-taking in the housing market, where many lenders approved mortgages to people with poor credit. These risky loans were bundled into financial products bought by investors worldwide. When housing prices fell, many borrowers defaulted, causing these products to lose value. This triggered a chain reaction, causing major financial institutions to fail or need government bailouts. The crisis led to a severe recession, high unemployment, and widespread economic instability, highlighting vulnerabilities in financial regulation and risk management.