13. Global Financial Crisis (2007-2008)
The Global Financial Crisis (GFC) of 2007-2008 was precipitated by the collapse of the U.S. housing market, leading to a severe global economic downturn. The crisis was characterized by the following key events:
Subprime Mortgage Meltdown: Financial institutions aggressively offered high-risk mortgages to borrowers with poor credit histories, leading to widespread defaults and foreclosures. (investopedia.com)
Collapse of Major Banks: The devaluation of mortgage-backed securities resulted in significant losses for major financial institutions. Lehman Brothers filed for bankruptcy on September 15, 2008, marking the largest bankruptcy filing in U.S. history.
Global Recession: The financial turmoil led to a severe global recession, characterized by widespread unemployment, a sharp decline in economic activity, and a significant contraction in global trade.
The GFC underscored the need for comprehensive financial regulation and reforms to prevent future systemic crises.
