The Great Financial Crisis (2007–2008) was a severe global economic downturn triggered by the collapse of the U.S. housing market and the proliferation of complex financial instruments like mortgage-backed securities. It began with the bursting of the U.S. housing bubble, leading to widespread defaults on subprime mortgages. Major financial institutions, heavily invested in these risky assets, faced massive losses, culminating in the bankruptcy of Lehman Brothers in September 2008. This sparked a credit freeze, stock market crashes, and a global recession, marked by high unemployment, bank failures, and significant government bailouts. The crisis exposed systemic flaws in financial regulation and risk management, leading to reforms like the Dodd-Frank Act.
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