The Nutshell

  The 2008 financial crisis was a global economic crisis that began in 2008 and lasted until 2010. It was caused by a variety of factors, including the subprime mortgage market, lax lending standards, and the failure of financial institutions. Subprime Mortgages: The crisis began with the collapse of the subprime mortgage market, which was furled by lax lending standards and a high demand for housing. Banks and other financial institutions issued mortgages to borrowers with poor credit, often with little or no documentation. These subprime mortgages were then packaged into complex financial products known as mortgage-backed securities, which were sold to investors around the world. Lax Lending Standards: Lending standards were lax, which allowed many borrowers who could not afford to repay their mortgages to take out loans. Lenders often did not verify the income or assets of borrowers, and many borrowers were approved for loans with little or no money down. This led t...