Global Financial Crisis: Cause and Impact

Abstract

The financial crisis of 2007–2008 is the worst financial catastrophe since the 1929–1933 Great Depression. The so-called "sub-prime mortgage crisis" caused the American financial sector to tragically collapse, wiping out the five major banks, the key economic data to continue to deteriorate, and inflationary pressures. The recovery will likely take a very long time, as is expected. This huge economic crisis even affected the world economic structure in the following ten years. The finacial crisis is so influncial that many economists are still committed to studying its causes and consequences. This paper analyzes the most important causes of this financial crisis as well as its effects in an effort to identify the best ways to reconstruct the whole financial system. Based on this, this paper comprehensively analyzes the causes of the 2008 Financial Crisis in the United States through relevant literature and data, and puts forward relevant suggestions.