Causes of the 2007-08 Financial Crisis Essay Example | Topics and Well Written Essays - 250 words

Causes of the 2007-08 Financial Crisis - Essay ExampleDue to this the mortgage originators had lesser incentive to motivate them to take careful underwritings (Chapra, M., 2009). The economy of the real estate pains was affected seriously by the step. With these kinds of effects that the real estate industry had on the economy of the world, it is quite evident that real estate industry is an economic to reckon.More attention was accorded to loan volumes rather than loan quality as banks fought to increase their investment opportunities hoping to maximize their profits as a result of the economic crunch (Torres, 2010). In Greece alone, investors became reluctant to do business or hitherto finance the Government deficits (Torres, 2010). With the decline in the confidence in government, falling by around 10% in many countries, it became very evident that the throng were discontent with the short term measures that were being taken by governments to try and solve the situation (Torres , 2010). The effects of the melt experience were felt quite deep down the social ladder. Starting at the top with the banks not trusting one another and the interbank credit being anemic, the unequal economic incomes affected the wage produce in countries where it would have been justified by the productivity