Essays on World Financial Crisis: Causes, Effects, and Solutions Report

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  The paper "World Financial Crisis: Causes, Effects, and Solutions" is a perfect example of a report on finance and accounting. Financial crises are things that occur often commonly, therefore making them a common phenomenon. In fact, the world has suffered and has been hit and affected by many crises, therefore making the current one not probably the last. However, the World Financial Crisis is termed as the most pronounced and severe as compared to the depression that was suffered in 1930 because many factors, ranging from macro-economic to market factors contributed to itThere has been a lot of complexity in market operations, therefore, proving difficult to manage and regulate market operations.

Some of the effects have been classified as short term, whereas others have been classified as long term, the reason being others are viewed to stabilize after a while whereas others will stabilize after a long time. Therefore, this report seeks to find the causes of the global economic crisis, the impacts, and possible solutionsBackground of the world financial crisisOverviewThe global financial crisis of the year 2008 was the most severe and whose effects can be felt even now, amounting to reduced levels of economic activities and consequent decline in economic growth (Wolf, 2014)History of Financial crisisOn September 11, 2008, the Lehman Brothers made a decision to file for chapter 11, hence leading to a financial crisis (Norgren, 2010).

Consequently, this led to one of the worst global financial performance. Ideally, the crisis is said to have developed from The American market, commonly known as the housing market. Prices in the housing market dropped by more than 31% in the year 2006 (Norgren, 2010).

Consequently, the level of household debt increased at a big rate and lending made to low-income earners increased, as evident in Fig 1In the year 2006, house prices declined tremendously as a result of decreased levels of construction activities. However, with an attempt to respond to the increasing decrease in house prices, house owners increased their own savings, negatively impacting on the general growth of the economy (Sivakumar & Krishnaswami, 2011)


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