The Financial Crisis

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Your probably thinking to yourself ,what is the financial crisis?How did it happen?Why did it happen? If you realy want to find out,then read on.

What is it?

Your probably thinking of what the answers could be.Mabe a robery or something dramatic like that .But no.The financial crisis is the biggest crisis that happened in 2008 and still is effecting some of us now.This caused millions of people all over the globe to loose their homes,jobs and money.

How did it happen?

It origonally started as a banking chrisis.That meant the bank was giving people loans even though they know not everyone could pay it back.It was mainly lent to people who wanted to buy houses or make busnesess however they didn't have resources to pay it back.These people were called subprime lenders.

Also the US banks were lending money to European banks, then European banks would use the money on mortagages backed security.This was unneeded and irrasponsible of them.

How did it effect our everyday life?

In the financial crisis millions of people lost their jobs because they wern't getting enough money from their boss .This was the effect of the bank not being able to pay the bosses so the bosses had to close the busness down making people loose jobs.

In addition to this, people lost their homes.This was because the people didn't pay the loans back so other people had their house taken away for the bank to get more money.

This also suggests that the prices of everyday resources in shops got more expensive,this is so that the bank could re gain the money they lost,and it costed everyone over 3000 pounds.

What could have the bank done to prevent this?

To prevent this , banks could have given people a set amount of money at a time so people could pay it back and only carry on giving money when they pay off the previous one.

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