What Is The Main Cause Of The 2008 Financial Crisis

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There is no way anyone could be unaware of the financial crisis of 2008, which began in the U.S. It was described as one of the most intense crises, if not the biggest, that has ever happened in the history of economics. ‘The main cause of this recession was the toxic assets, which are defined as investments backed by risky subprime mortgages’ (About money, 2015). In this short essay, I am going to examine the possible perspective of Hyman Minsky, an important political economist who grew up during the Great Depression and examined investments and the financial fragility on the subprime mortgage market (Riccardo Bellofiore and Piero Ferri, 2001).

In the early 2006, owing a house started being a ‘trend’, nobody thought that the U.S. would end up in a recession. Banks were happily giving away mortgage loans to people ‘who could put 20% of the price of the house down’ (About money, 2015) and who could pass through several factors, such as the net worth. …show more content…
The idea was to lend money for a mortgage loan to people who did not pass through the requirements that the other borrowers had to be qualified with, they even created a rate that was modifiable to these specific borrowers. The result of this idea was to take over the mortgaged properties, since borrowers could not pay their desired monthly value of their loan (About money,

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