US financial crisis
RESEARCH PAPER 09/34
22 APRIL 2009
The financial crisis in the US: key events, causes and responses
The current financial crisis started in the US housing market in 2007. The crisis spread across the world and severely damaged the economies of many countries, including the US, and reached a new level in
September 2008 as a number of prominent US-based financial institutions, including AIG and Lehman
Brothers, collapsed.
This Research Paper first examines the underlying causes of the crisis in the US. In particular, it examines the emergence and collapse of the housing bubble and the significance of the complex financial instruments that transformed an asset price correction into a significant domestic and global economic downturn.
The main focus is the response of governing institutions in the US. Looking at responses before and after September 2008 – drawing comparison with the
UK where relevant – this Paper examines the actions of a wide range of institutions including the Federal
Reserve, US Treasury, Congress, Securities and
Exchange Commission and Federal Deposit Insurance
Corporation.
John Marshall
BUSINESS AND TRANSPORT SECTION
HOUSE OF COMMONS LIBRARY
RESEARCH PAPER 09/34
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22 APRIL 2009
The financial crisis in the US: key events, causes and responses
The current financial crisis started in the US housing market in 2007. The crisis spread across the world and severely damaged the economies of many countries, including the US, and reached a new level in
September 2008 as a number of prominent US-based financial institutions, including AIG and Lehman
Brothers, collapsed.
This Research Paper first examines the underlying causes of the crisis in the US. In particular, it examines the emergence and collapse of the housing bubble and the significance of the complex financial instruments that transformed an asset price correction into a significant domestic and global economic downturn.
The main focus is the response of governing institutions in the US. Looking at responses before and after September 2008 – drawing comparison with the
UK where relevant – this Paper examines the actions of a wide range of institutions including the Federal
Reserve, US Treasury, Congress, Securities and
Exchange Commission and Federal Deposit Insurance
Corporation.
John Marshall
BUSINESS AND TRANSPORT SECTION
HOUSE OF COMMONS LIBRARY
RESEARCH PAPER 09/34
Recent Library Research Papers include:
09/19
Small Business Rate Relief (Automatic Payment) Bill [Bill 13 of
03.03.09
2008-09]
09/20
Economic Indicators, March 2009
04.03.09
09/21
Statutory Redundancy Pay (Amendment) Bill [Bill 12 of 2008-09]
11.03.09
09/22
Industry and Exports (Financial Support) Bill [Bill 70 of 2008-09]
12.03.09
09/23
Welfare Reform Bill: Committee Stage Report
13.03.09
09/24
Royal Marriages and Succession to the Crown (Prevention of
17.03.09
Discrimination) Bill [Bill 29 of 2008-09]
09/25
Fuel Poverty Bill [Bill 11 of 2008-09]
17.03.09
09/26
Unemployment by Constituency, February 2009
18.03.09
09/27
Coroners and Justice Bill: Committee Stage Report