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2008-2009 Credit Crises

In: Business and Management

Submitted By JulieKrahling
Words 2136
Pages 9
| The 2008-2009 Credit Crises

Executive Summary The Great Depression was when America faced the worst economic catastrophe in history. It wasn’t until the nineties that the financial industry started to re-invent itself for the purpose of making more money. Banks became successful at modifying legislation and creating ventures that would profit investors. The level of risk involved with the securities produced was ignored. Initially, the securities that were built were not expected to fail. When the home loan industry began to breakdown it became clear that something needed to be done. Legislation that the financial industry was trying to avoid was necessary. The Dodd-Frank Act was enacted as a result.
Introduction

The financial industry is currently facing a number of challenges such as poor investment strategies, improper activities by lenders and poor ethical standards within investment companies. Over the last 3 years more than 200 financial institutions within the United States have ceased to exist because of the 2008-2009 credit crises. Restoring confidence in the financial environment has been an uphill battle since the credit crises began. Today banks that were not able to sustain operations are being acquired by others that are more stable which causes the long-standing institutions to become more risky. As a result the acquisitions are dramatically affecting the remaining banks and further weakening the finance industry. Banks have been searching for ways to boost cash flows with new regulations in place; most recently by raising fees for previously free services. This paper will examine the history of how the credit crisis began and the new legislation put into place to protect consumers from the destructive lending practices that caused current economic conditions.

A Brief History

In order to understand how financial

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