Global Financial Crisis: Causes and Results

Abstract

This study aimed to identify the situation of the global financial crisis, the potential causes behind it and the extent of their effects on the the US and global economy, and discuss the extent of seriousness of the procedures adopted to solve this problem. The topic of the study was discussed in two main areas, namely the causes that increased the financial crisis in the US and global economy, and their consequences on the US and global economy. A number of causes and consequences were introduced in this study; for example, the great expansion of granting lease loans in the US market without sufficient guarantees; the trust between banks and financial institutions, and customers' debts was destroyed, extensive application for the credit system with no balance, and banks' misbalance (i.e., disvaluing things against obligations and fake transactions). Concerning solutions, experts emphasized that issuing ponds and providing much money to market currently by the US administration, ignoring inflation, is merely a temporary solution rather than a tangible one.