What are the causes of the financial crisis?

The financial crisis occurs when household, business, industry or countries can no longer afford to cover their debts. Some people think of a great depression or a financial disaster in 2007-2008, considering a "financial crisis", but this term may apply to a family or individual who finds himself from funds when medical or family emergency intervenes. There are many different causes of the financial crisis; The situation that lasted for a while is often caused by a dramatic event. In other cases, an unforeseen risk or the problem that has been implemented can leave a successful enterprise in the risk of insolvency.

The main economic accident, such as the financial crisis in 2007-2008, is often caused by a combination of problems. Many economic analysts attribute the causes of the financial crisis in this case the trend of deregulation, which allowed loans on a mortgage for housing to reduce rental standards and offer more and more risky loans, including SLAvné sub-pre-open mortgages. Given that the amount of people who can buy houses are not endless, the market eventually reversed, where the number of people who apply for loans could no longer maintain the offered rates. The construction narrowed and many creditors began to increase the mortgage, which quickly led to panic on the financial market. As interest rates rose, people excluded and deprived the main financial companies for the income they rely on, which in turn led to the bankruptcy of the company, flourishing unemployment and serious economic depression.

The causes of financial crisis situations of this size can be traced for decades, even to the original financial philosophies of economic giants such as John Maynard Keynes. Unfortunately, the lack of caution and the desire for immediate profit can cause a large industry further and to risk loans and investments, driven by mob. Some economistsThey go so far that they say that fear and panic, rather than a realistic circumstance, can lead the macroeconomic market to the financial crisis.

There may be many isolated or interdependent causes of the financial crisis in business. Blind, bad public relations, memories of high -ranking or simple bad performance can do business into an unsurpassed debt. The macroeconomic crisis, such as recession, can hurt many businesses, as increasing unemployment is reflected in a reduction in consumer expenditure that can destroy many small businesses. Businesses may try to manage the risk by repaying debts such as beginning loans, and by increasing their monthly cash flow so that all accounts are up to date, but many of them remain terribly dependent on market whim.

In the household, the causes of the financial crisis often include poor budgeting or high living costs. With many necessary subjects from health care to school to college, which increases in the price of since mid -20.century, even families that carefully budget expenses can be difficult to save on a rainy day. As a result, the financial crisis may occur when a household operating at a monthly survival face a sudden crisis such as medical emergency.