Causes and Consequences of the 2008 Financial Crisis: A Critical Review

Abstract

The analysis of the financial crisis is crucial for the growth of the world economy, particularly given the complicated economic environment that COVID-19 is currently experiencing and the war in Ukraine. This paper will discuss the most significant financial crisis that happened in 2008, which was brought on by the financial authorities' shoddy implementation and upkeep of their policies. The collapse of several major banks and financial institutions, high unemployment, government bailouts, the collapse of the real estate market, regulatory reforms, and economic recession were the main consequences of the crisis. It is essential to research and examine the factors that led to the financial crisis of 2008 and its consequences. First, research of this kind enables us to comprehend the underlying causes of the financial catastrophe. Secondly, financial crisis research helps to identify early warning signs of impending crises. Third, the study of financial crises can provide valuable insights into the behavior of financial markets and financial institutions. Fourth, research on financial crises can help inform public policy debates. Finally, research on financial crises can help improve transparency and accountability in the financial sector. Such research can inform public policy, promote transparency and accountability, and help ensure a more stable and sustainable global economy.