The temptation offered by such readily available savings overwhelmed the policy and regulatory control galleass forex review rated in country after country, as lenders and borrowers put these savings to use, generating bubble after bubble across the ut markets forex review rated. 2007 and 2008 caused the equivalent of a bank run on the U. This system had grown to rival the depository system in scale yet was not subject to the same regulatory safeguards.
Financial Crisis Inquiry Commission reported its findings in January 2011. The immediate or proximate cause of the crisis in 2008 was the failure or risk of failure at major financial institutions globally, starting with the rescue of investment bank Bear Stearns in March 2008 and the failure of Lehman Brothers in September 2008. These factors drove a large increase in demand for high-yield investments. Many institutions lowered credit standards to continue feeding the global demand for mortgage securities, generating huge profits that their investors shared. When the bubbles developed, household debt levels rose sharply after the year 2000 globally. Households became dependent on being able to refinance their mortgages.
But large default rates on subprime mortgages cannot account for the severity of the crisis. Rather, low-quality mortgages acted as an accelerant to the fire that spread through the entire financial system. Federal Reserve Chair Ben Bernanke testified in September 2010 regarding the causes of the crisis. Economists surveyed by the University of Chicago rated the factors that caused the crisis in order of importance.