The Global Financial Crisis.

In the extract "The Global Financial Crisis" it is presented that the financial crises and other economic recessions have have occurred throughout. And a major the US is a place which gets affected because of all these happenings. There was a financial crisis in the United States which was faced around the year 2008-2009. The financial crisis triggered a global economic recession that resulted in more than 4.1trillion losses, unemployment rates that climbed to more than10 percent in the United States and higher elsewhere, and increased poverty. Stock market around the world crashed in 2008. Property became expensive, the prices were touching the heights. There many reasons behind the financial crisis and recession. The major one is the humans and their greed to have money. To satisfy their needs they spend more without any consideration and end up being in debt. There were various financial crises that took place and affected the whole world. The deregulation in the financial markets was due to the Great Depression of the 1930s. It led to the implementation of the financial regulation to stabilize the economy and to give American savers confidence in banks. A lot of new financial innovations also played their part in getting the financial crisis back again. Those innovations were so fast and new that people and even the banks could not handle it and risked everything leading to many confusions and ineffectiveness. Innovations like securitization and hedge funds had a major hand in pushing the economy towards the financial crisis. Securitization is the financial engineering designed to reduce financial risk. Isn't it ironical that the innovation that was designed to reduce the financial risk itself pushed finances into crisis. Not only securitization and hedge funds, but also many other innovations were involved to put the finances into risk. Interest.rates dropped, subprime loans, and mortgages were easily available. The impact of the Global Financial Crisis was seen all over the world. Industries suffered, manufacturing declined, unemployment increased, a global recession created widespread hardships.Purchasing a property was a challenge during the crisis as the rates were touching the heights. There was a global power shift from various countries to others. Majorly the power was shifted from the United States, Western Europe, and Japan to the BRIC countries- Brazil, Russia, India, China. Various countries responded to the Global Financial Crisis differently. Though every country responded differently, their thinking was the same, to restore their financial state and bring the economy back to path.