A Retrospective on the 2008 Global Financial Crisis

The global financial crisis of 2008 led to the most severe decline in production and employment and in world trade since the Great Depression of the early 1930s. Hundreds of banks and other financial firms failed in the United States, Great Britain, Ireland, Spain, the Netherlands, Germany, and Belgium. Greece and Portugal had sovereign debt crisis about fifteen months later; their governments would have defaulted on their debts if they had not been able to borrow from the International Monetary Fund and the European Central Bank to obtain the funds to repay maturing debt. The tenth anniversary of this global debacle provides an opportunity to review the cause or source of this crisis and the most appropriate policies and regulations to reduce the likelihood and severity of similar events.