The financial crisis in 2007 to 2008 is known as the global financial crisis. It is also considered to be the worst crisis to impact the world markets after 1930s. In 2007, there was a crisis in the subprime mortgage in the American Markets. This became an international banking crisis with the collapse of the Lehman Brothers on 15th September 2008. There was excessive risk that the banks had taken and this has amplified into a global crisis. There were massive bailouts, palliative monetary and fiscal policies that have impacted the world financial system. The crisis was caused by the economic downturn which leads into great recession. Subsequent to this, the Euro zone was affected by the crisis.This crisis was considered to be a global crisis that had impact across the world (Goodhart, 2008). This affected the individual families in different ways across the spectrum. Similar impacts were echoed in the United Kingdom as well.
There are many theories that discuss about the root causes of the financial crisis of 2007 to 2008. However, the financial crisis did occur and it caused a major detrimental impact on the people. The financial crisis did not occur only in United Kingdom, but it had occurred across the spectrum. It was found to originate from the subprime mortgage issue stemming from the United States. Massive bailouts, palliative economic policy and a change in the fiscal policy were found to be in place. There was increase in the regulations and the mandates of the government. The impact had affected the United Kingdom deeply. People across different income level and ages were affected by the recession. There was a decline in the growth of the nation. The GDP of the nation was found to be reducing at a continual basis. To overcome the issue, the government introduced more regulations, ensured that the companies adopted a fiscal conservative attitude and ensured that the subprime loans were controlled.
To conclude, the recession impacted people and their lives. The lifestyle of the people was changed owing to recession. The recession also brought to light a number of issues that are pervading the economies. There is a need for a better financial system to ensure that these events do not occur again in the societies.