Financial Crisis In The Year 2008 Essay Example | Topics and Well Written Essays - 1500 words

Financial Crisis In The Year 2008 - Essay ExampleIn the mid-1990s the US embraced financial globalization as the touchstone for the grand strategy in the post-cold war period. In those periods it was popular to talk about the decline of the US economy. However, the unexpected collapse of the Soviet Union and the stool of the japan as an economic superpower brought the American economy to the center stage in the world place of business. The financial crisis of the year 2008 had multiple reasons behind its occurrence. The most important are perhaps the financers themselves. The financers claimed that they had found a way to banish the risks although, in reality, they had actually lost the track of the same. The central bankers and the regulators tolerated and let these things continue nether their very noses for years. The macroeconomic environment too played an important role in the build-up to the crisis. The great alleviation which was characterized by years of low inflation and stable rate of growth had fuelled risk-taking desires in individuals. People became self-satisfied and this increased their risk-taking ability and desires. The glut in savings in the Asia turned interested rates down. withal European banks which greedily borrowed from the American banks before the financial crisis used the funds so as to leverage dodgy securities. ConclusionThe above essay finds that there were several factors that led to the financial crisis in the year 2008. about of the reasons behind the crisis were related to the economic policies pursued over the years.