Explanation:
The primary and most direct catalyst for the 2007-2009 global financial crisis was the severe losses originating from the collapse of the US subprime mortgage market, which then cascaded through the financial system via securitized products like mortgage-backed securities and collateralized debt obligations.
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Q.96 Since the Great Depression, there has been a lot of research to establish the historical causes that lead to major financial crises, including the one that happened in 2007-2009. Which of the following was the major cause of the 2007-2009 financial crisis?
A
The emergence of new financial instruments offering higher profits compared to traditional investments.
B
A lack of government regulation of financial markets.
C
Losses on subprime mortgages.
D
None of the above.