News / Economic Divide

10 year anniversary of the financial crisis

Saturday, 24 June 2017 3:38 PM [ Last Update: Saturday, 24 June 2017 3:39 PM ]

financial crisis

ECB rules out rate cut but confirms QE until year end. Sounds good, right? Wrong: this means that 10 years after the financial crisis the EU and the eurozone still need economic CPR from the European Central Bank, billions of euros every month.

This week we will look at the financial crisis. it's been 10 years since the global financial meltdown. From the US, in which the mortgage crisis melted the markets and banks in the US, to the ripple effect which then engulfed the entire world, especially the eurozone. Has the world recuperated since that day, a decade on? it's a mixed bag, with some like the EU still recovering, with the emerging economies riding on the coattails of global growth.

Starting in 2007, and lasting 2 years, the World Economy experienced its most severe financial shock in decades, matching that of the Great Depression of the 1930's, and became one of the most important economic downturns since the Second World War. Unlike a regular recession, the financial crisis of the late 2000s had a global impact and affected not only businesses, banks and people, but almost took out entire nations, with Greece being an example of how a countries economy could collapse.

It is widely argued that the catalyst for the financial collapse occurred due to the subprime mortgage lending that the US saw widely available. The collapse was triggered by a large decline in house prices following the collapse of the housing bubble.

It has been argued that the housing bubble, lending, loan management and credit amounted to a sum in the region of $1.2 Quadrillion. (In written numbers, that's 1 with 15 zero's after it). This money was solely virtual, and did not in fact exist, and hence was one of the reasons that the financial crisis saw its birth.

Playing with trillions of dollars of virtual money came with a price, and none was more obvious than the collapse of the Lehman Brothers bank in the US. Until today, 10 years on, the collapse of the Lehman Brother still remains the largest file for bankruptcy in US history.

The organization which held assets in the region of $600 Billion collapse was so great, the Dow Jones fell 500 points in one day, triggering the financial crisis at an alarming rate. The collapse of the Lehman Brothers not only had an important impact on the global economy, but naturally, much further down the scale, the everyday person was hit hard too.

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk