Describe some of the factors that led to the collapse of the financial system during the fall of 2008

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History

Esperanza Bailey

1 July, 02:21

Describe some of the factors that led to the collapse of the financial system during the fall of 2008

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Libby Dunn · Answer 1

The financial crisis happened because banks were able to create more money, they used this money to push up house prices and speculate on financial markets.

Interest had to be paid on all the loans that banks had made, and with the debt rising quicker than incomes, people could not keep up with the repayments.

They stop repaying loans and the banks would find themselves in danger of going bankrupt.

All of these caused the collapse of the financial crisis of 2007-2008.