Tenth anniversary of 2008 financial crisis
September 15, 2018 - September sees the 10th anniversary of the collapse of Lehman Brothers bank and the start of the crisis that plunged the world economy into recession.
2008 marked the beginning of the global financial crisis that caused the worst recession in living memory and nearly destroyed the financial system.
Banks failed, stock markets crashed and entire nations had to be bailed out. The effects are still being felt today, with low growth and political upheaval around the world.
The crisis was triggered by the 2007 collapse of the U.S. subprime mortgage market, a sector of the industry that lent to borrowers with poor credit and little means to make repayments.
Subprime mortgages were shared and repackaged with traditional mortgages, and then sold to investors who were led to believe the risk had been spread.
Initially it seemed to work, helping to maintain a house price boom. But a rise in the number of borrowers defaulting instigated a housing market fall, and those repackaged mortgage investments swiftly became toxic.
Confusingly, no one knew who held the bad debts, so banks became wary of lending to each other. The loss of confidence triggered a catastrophic spiral of financial failure that saw the mighty U.S. bank Lehman Brothers collapse.
It wasn’t long before global economies sank into the worst recession in post-war history.