Causes for the 2007-08 Financial Crisis Essay Example | Topics and Well Written Essays - 500 words

Causes for the 2007-08 Financial Crisis - search ExampleThe property market was a major contribution to the fiscal crisis. The collapse in prices of mortgaged houses put homebuyers in debts as they had speculatively spent so much money on overvalued property. The financial crisis arose from weak financial policies, which permitted banks among other financial institution make precarious investments as the outline portrays.b. response The financial crunch affected investment in the real estates industry beginning(a) in the United States before the effects spiraled to other major global economies therefrom reducing the majority of activities at major stock markets thus culminating in the crisis.a. Response With intense speculation on the sizing and lucrativeness of the industry, numerous investors including financial institutions increased to invest and compete for the market (Starkman, 2014).b. Both commercial and investment banks thus competed for the market. They introduced pre carious policies that permitted the banks to invest extensively in the industry without cushioning themselves from the unpredictable nature of the