To answer the question it is important to have a strong understanding of the 2008 Financial crises, in turn providing greater knowledge and thus giving a solid base to develop points and conclusions.
The 2008 Financial crises was considered the worse since the 1930's Great Depression, inflicting threats of collapse of many high profile banks and bail outs by Governments. Significant falls in stock markets had deepened the crises, directly hitting the people. One major consequence of the crises was the confidence people and firms had in the market, as a result hitting the market harder through declined investment and consumption.
No one is 100% clear on the actual causes of the crises however there are many factors, such as; Sub-prime lending, Easy credit conditions, Predatory lending, Deregulation, Economic forecasting and a fundamental systematic crises of the political system.
There was a significant impact on financial markets; The IMF estimated that large European and US banks lost more than $1 trillion on risky assets and loans, from 2007 - 09, rising to $2.8 trillion from 2007 to 2010. The people suffered as a result, depicted through significant falls in asset prices, such as the housing market, and unemployment. The most notable consequence however was the on going Recession which persisted through to 2012 .
Responses to the crises included, in the short term, attempts to expand monetary supplies (to avoid the risk of a deflationary spiral), large Government stimulus packages and bailouts - the US pursuing two totaling around $1 trillion - as well as a credit freeze by the Federal reserve and the European central Bank. Long term responses mostly consisted of stronger regulation, European regulators introduced Basel III for banks (limits on leverage, limit counter parry risk and new liquidity requirements) while in the US Obama introduced regulatory proposals in June 2009 covering capital requirements to enhanced authority of the Shadow banking system.
The fact the US and UK economy is out of recession suggests stabilization, however the significant turmoil the crises brought still scars the global economy, with the constant threat of a triple dip recession. Full recovery will take time, however may be disrupted by the constant threat of another recession.
The 2008 Financial crises was considered the worse since the 1930's Great Depression, inflicting threats of collapse of many high profile banks and bail outs by Governments. Significant falls in stock markets had deepened the crises, directly hitting the people. One major consequence of the crises was the confidence people and firms had in the market, as a result hitting the market harder through declined investment and consumption.
No one is 100% clear on the actual causes of the crises however there are many factors, such as; Sub-prime lending, Easy credit conditions, Predatory lending, Deregulation, Economic forecasting and a fundamental systematic crises of the political system.
There was a significant impact on financial markets; The IMF estimated that large European and US banks lost more than $1 trillion on risky assets and loans, from 2007 - 09, rising to $2.8 trillion from 2007 to 2010. The people suffered as a result, depicted through significant falls in asset prices, such as the housing market, and unemployment. The most notable consequence however was the on going Recession which persisted through to 2012 .
Responses to the crises included, in the short term, attempts to expand monetary supplies (to avoid the risk of a deflationary spiral), large Government stimulus packages and bailouts - the US pursuing two totaling around $1 trillion - as well as a credit freeze by the Federal reserve and the European central Bank. Long term responses mostly consisted of stronger regulation, European regulators introduced Basel III for banks (limits on leverage, limit counter parry risk and new liquidity requirements) while in the US Obama introduced regulatory proposals in June 2009 covering capital requirements to enhanced authority of the Shadow banking system.
The fact the US and UK economy is out of recession suggests stabilization, however the significant turmoil the crises brought still scars the global economy, with the constant threat of a triple dip recession. Full recovery will take time, however may be disrupted by the constant threat of another recession.