Question

Name and explain two of the reasons the congressional committee identified for the recent financial crisis?

Answer 1

The 2008 recession/financial crises one of the worst of its kind in a generation. Major economies including the United States and the UK suffered a period of recession, consistent low-growth, rising unemployment and many businesses closing down.

A 10-member committee called the Financial Crisis Inquiry Commission was setup by the US government to study the causes of the recession, in the hopes that a future similar crisis could be prevented.

In 2011, the committee released their findings and pointed out the two major reasons for the crisis:

1. The basic reason for the crises as the Collapse of the housing market.

2. Which in turn was fueled by toxic mortgages, low-interest and easy credit available to everyone and minimal regulation.

The report also pointed out vast problems of corporate governance, lack of government will and unpreparedness.