A retrospective on the 2008 financial crisis: in-depth analysis

Abstract

The financial crisis has always been one of the most worrying and talked-about topics in finance. Triggered by a series of interconnected factors, the main causes included the housing market bubble and subprime mortgages. The wide-ranging and long-lasting consequences included a global economic recession, rising unemployment, massive losses for investors, and deteriorating public finances in many countries. In the liberal capitalist economy, financial crises are frequent and repetitive phenomena, hence the importance of analyzing the 2008 financial crisis to prevent future ones. Regulations and laws such as the Dodd-Frank Act and the Basel III reform have been put in place to meet the challenges of this crisis. It is against this backdrop that the present document focuses on an in-depth analysis of the causes and consequences of the financial crisis, as well as an overview of the regulations, laws, and reforms put in place to meet these challenges.

The various factors that led to the crisis, such as the formation of a real estate bubble, inappropriate monetary policies, sub-prime mortgages, and credit default swaps, have been meticulously analyzed to provide a comprehensive view of the deep roots of the crisis. The repercussions of the crisis, including bank failures, mass bankruptcies of major financial institutions (LEHMEN BROTHERS), unemployment rates, and stock market fluctuations, were also examined to highlight the considerable impact of the crisis on various sectors of the economy.

Keywords: Housing market bubble; Subprime mortgages; Crisis prevention; Dodd-Frank Act; Basel III

JEL Classification: G01

Type of paper: Theoretical research