Overview of the financial crisis and banks

Overview of the financial crisis and banks

The 2008 financial crisis was the most serious economic disaster since the Great Depression of 1929. The sign of the economic crisis began as house prices began to fall, but real estate agents, including banks, did not realize that some lenders were unable to pay for home loans. Eventually, lead to the housing bubble formed and house prices fell by 31.8%.https://www.thebalance.com/2008-financial-crisis-3305679

Banks are losing a lot of money as more and more lenders fail to repay outstanding bank loans. This led to the formation of the subprime mortgage crisis, the housing credit industry default and credit crunch caused panic in the financial market.

For example, on September 15, 2008, Lehman Brothers (one of the world's largest investment banks) filed for bankruptcy. Through the diversification of the world economy and the background of integration, the impact of the economic collapse has spread to most countries in the world, causing a global economic recession.

Arie Korving pointed out that the impact of the banking industry in 2018 is very large. Banks have closed down or have to be bail-out by the government and even forced to merge with stronger partners. https://www.investopedia.com/ask/answers/033015/how-did-financial-crisis-affect-banking-sector.asp

In order to avoid a similar financial crisis. In the BBC News on June 17, 2009, the report stated that the US government announced major reforms in banking supervision. At that time, US President Barack Obama believed that the lack of supervision of financial companies led to systemic flooding, which brought risks to both companies and individuals. 

The government says the U.S. central bank, the federal reserve, will gain authority to regulate major financial institutions. In November 2010, the international Basel committee approved proposals for new capital and liquidity standards for the global banking sector, known as Basel III.

however, today, the financial crisis does not disappear, it is still lurking in the economic society. For example, in recent years, Britain has been discussing the issue of leaving the European Union, and all industries must make countermeasures for the post-Brexit. The total amount of cross-border trade between the UK and other EU countries is huge. Whatmore, The bank of England believes that a "disorderly" exit from the EU could plunge the UK economy into a contraction worse than the 2008 financial crisis.

Other references:

https://www.thestreet.com/personal-finance/mortgages/subprime-mortgage-crisis-14704400

http://news.bbc.co.uk/1/hi/business/8104700.stm

https://www.oxera.com/agenda/brexit-implications-for-the-banking-sector/

https://www.cnbc.com/2018/11/28/bank-of-england-2018-uk-bank-stress-tests-and-brexit-report-published.html