([London] Times Leader) Five Years On in the Greatest Financial Crisis since the great Depression

The greatest economic catastrophe of the postwar world began five years ago today. Its consequences are still with us.

On this day in 2007 BNP Paribas, the French bank, halted withdrawals from three investment funds linked to the US subprime mortgage market. Risky financial products had spread a contagion of bad debts through the banking system. The interbank lending market froze because banks feared that they would not get their money back. The consequences included the first run on a British bank in more than a century (Northern Rock), the biggest corporate failure in American history (Lehman Brothers), and a huge recession.

With hindsight, this was not merely a crisis but a catastrophe that still overshadows the global economy. The crash was a far-reaching problem of solvency. It was not simply a banking crisis, but a debt crisis. It has not simply sunk financial institutions, but submerged governments too. Five years on, there are three questions. How did it happen? When will it end? What, if anything, can we do about it?

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, Euro, Europe, European Central Bank, Federal Reserve, History, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Politics in General, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government