The Great Financial Crisis

The Great Financial Crisis of 2007-2008 was a severe economic downturn caused by excessive risk-taking in the housing market. Banks offered many people risky home loans, which led to a housing bubble. When housing prices fell, many homeowners defaulted, causing huge losses for financial institutions. This crisis spread worldwide, as banks and markets lost confidence, leading to a credit crunch that hurt businesses and consumers. Governments and central banks intervened with bailouts and stimulus measures to stabilize the economy. The crisis highlighted vulnerabilities in financial systems and resulted in significant reforms to prevent similar events.