Lessons learned from the prior global banking crisis? What should be done to prevent such a crisis from happening again?
The global banking crisis of 2009 resulted into high and drastic unemployment level. It causes major businesses to close. Other big businesses in the car industry were able to survive through bail out policies of the US government.
Here's a background of the causes that resulted to the global banking crisis as narrated by Rude (2008):
- The current economic difficulties have a United States origin.
- The original underlying assets were houses whose prices were falling. The collapse of the securitized US mortgage market and its related derivative products amplified the weakness of the US housing sector, sending a contractionary shock through the US economy and to the rest of the world.
- Asset backed commercial paper issued by the spe-cial purpose vehicles now in trouble brought weakness ...
The solution describes the global banking problems and what policies may be implemented to stop the same problem from happening again.