Презентация на тему Global financial crisis

financial crisis and 2008 financial crisis, is considered by many economists

to have been the worst financial crisis since the Great Depression of the 1930s

is subprime lending ?

The answer is simple : The

housing bubble burst ( U.S. subprime mortgage crisis)

Subprime lending means giving loans to people who may have difficulty in maintaining the repayment schedule. These loans are characterized by higher interest rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk.
Example: student loans in India are considered to be subprime.

to do a quick explained about mortgages. Basically someone

that want to buy a house will often borrow hundreds of thousand of dollars from a bank. In return, the bank gets a piece of paper, called a mortgage.

a portion of the principle, plus interest to whoever

holds the piece of paper. If you stop paying, that's called a default

Traditionally, it was pretty hard to get a mortgage if you had bad credit or didn't have a steady job. Lenders just didn't want to take the risk that you might “default” on your loan but all that started to change in the 2000s.

abroad looking for a low risk, high return investment

started throwing their money at the U.S. housing market.

some individuals mortgage. Instead, they bought investments called mortgage

backed-securities. At the same time, credit ratings agencies were telling investors these mortgage backed-securities were safe investments. Anyway, investors were desperate to buy more of these securities. So, lenders did their best to help create more of them. But to create more of them, they needed more mortgages. So lenders loosen their standards and made loans to people with low income and poor credit.

new. These investment were becoming less and less safe

all the time. But investors trusted the ratings, and kept pouring in their money.
While, the investors and traders and bankers were throwing money into the U.S. housing market, the U.S. price of homes was going up and up and up. People just couldn't pay for their incredibly expensive houses, or keep up with their ballooning mortgage payments.

Financial Institutions

stopped buying sub-prime mortgages and sub-prime lenders were getting

stuck with bad loans. By 2007, some really big lenders had declared bankruptcy. The problem spread to the big investors, they started losing money on their investments.

someone to blame. In the case of the 2008

financial crisis no one had to look very far because the blame and the pain was spread throughout the U.S. economy. The government failed to regulate and supervise the financial system The financial industry failed. Everyone in the system was borrowing too much money and taking too much risk, from the big financial institutions to individual borrowers. The institutions were taking on huge debt lads to invest in risky assets. And huge numbers of home owners were taking on mortgages they couldn't afford.

systemic failure, is that it happened in a system

made up of humans, with human failing. Some didn't understend what was happening. Some willfully ignored the problems. And some were simply unethical, motivated by the massive amounts of money involved.

magazines like The Economist, BusinessWeek, Business Today
read relevant websites
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