The global financial crisis (GFC) refers to the period of extreme stress in global financial markets and banking systems between mid 2007 and early 2009. It was a severe worldwide economic crisis that had far-reaching effects, not just restricted to the U.S. The causes of the crisis included a combination of factors such as subprime mortgage lending, excessive risk-taking by banks, and an increase in debt levels. Following the GFC, trade openness slowed significantly.

causes of the global financial crisis

The main causes of the Global Financial Crisis (GFC) include misperception and mismanagement of risk, the level of interest rates, and the regulation of the financial sector. Other factors that contributed to the crisis include deregulation, securitization, and the Federal Reserve's poor timing in lowering and raising interest rates. Additionally, empirical evidence suggests that financial imbalances ahead of the GFC were driven by three factors.

impact of the global financial crisis

The effects of the Global Financial Crisis (GFC) included a deep impact on the housing market, widespread layoffs and extended periods of unemployment, a global banking crisis, a credit market freeze, and a significant contraction in global economic activity. Additionally, the crisis may have left lasting scars beyond these well-documented effects on growth trends, such as decreased fertility rates.

solutions to the global financial crisis

Solutions to the Global Financial Crisis (GFC) included the US Government's crisis response, the Federal Reserve's response to the financial crisis, and reforms by the G20 following the 2008 financial crisis. Additionally, regulatory responses to the GFC were identified in order to create stable yet efficient financial systems.

The G20 responded to the Global Financial Crisis (GFC) of 2007-2008 by calling on the OECD and other key international organisations to help it respond. The G20 also appointed itself as the preeminent forum for global economic policymaking and took action to alleviate the cost-of-living crisis.