2007–2008 financial crisis

The financial crisis of 2007 and 2008 was the most serious in the world economy since the Great Depression. It began in the United States, where a boom in housing prices was fuelled by cheap credit and risky mortgage lending, and many of the loans were packaged into complex securities and sold to banks and investors around the world. When house prices began to fall and borrowers defaulted, the value of these securities collapsed and banks stopped lending to each other. Early signs included the run on the British bank Northern Rock in 2007, and the crisis deepened in 2008 with the rescue of Bear Stearns and the failure of Lehman Brothers in September. Governments bailed out banks and central banks cut interest rates, but a deep global recession and the later European debt crisis followed.

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