Collapse · 2007–2009
Global financial crisis
Lehman Brothers headquarters, Seventh Avenue, New York City
A US housing boom fuelled by risky subprime mortgages turned to bust, and from early 2007 securities tied to those loans collapsed in value, spreading losses through banks worldwide. The crisis peaked when the investment bank Lehman Brothers filed for bankruptcy on 15 September 2008, the largest bankruptcy in US history, triggering stock-market crashes and bank runs; governments responded with huge bank bailouts and monetary and fiscal stimulus to prevent a collapse of the financial system.
Why it mattered
It deepened the Great Recession (December 2007 to June 2009), the longest US downturn since World War II, in which US unemployment peaked at 10 percent, and contributed to crises in Iceland and the eurozone.
Related
- The world in 2008: The Great Crash chapter
- The smartphone: the iPhone puts the Internet in every pocket previous moment · 2007
- The Paris Agreement on climate change next moment · 2015