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What Are the Causes of the Global Financial Crisis?

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What are the causes of the global financial crisis?

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What are the causes of the global financial crisis?
Introduction
Achieving stability has always been the number one priority in any county or organization. Financial stability is probably one of the most sort after achievement everywhere in the world. When a country or company fails to attaining financial stability then things are deemed to go wrong. The global financial crisis brought about the worst kind of financial instability in the global economy. It started in the United States and spread all over the world like wild fire. Even the top performing economies in Asia like China were not left out. This economic turbulence brought about both economic and social hardships (Helleiner,1994) . This was partly blamed on the already established Capitalist ideologies that prevailed especially in the United States.
This crisis exposed most economies to financial difficulties as it proved the dependence of most nations on dollar denominated financial transactions. The only way to salvage these economies was through fiscal and monetary interventions by the Governments of the day. Bail-out packages were presented to major economy drivers and industries to help ease the financial crisis that had affected their operation.
The collapsing of large financial institutions like the Lehman Brothers bank brought about a lot of chaos in the industry. Large bailout packages were used to help revive the sector. The bankruptcy of this global institution led to the shooting of interest rates of lending among banks to almost 5% a figure that was previously almost close to zero (Ravenhill,2014). Risk premiums on corporate bonds also increased at a high right to almost 6% which was a record high
Increased competition in the lending business led to organizations diverting their search for...

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