The Global Financial Crisis: Daunting Tasks Ahead

The global financial and economic crisis started in 2007 as an aftermath of the housing sector bubble coupled with aggressive lending practices in the US sub-prime mortgage market and lax regulation of the financial sector. To start with, these developments affected the companies holding mortgage-backed securities and credit derivatives. The early signs of the crisis were evident in 2007; but the financial crisis developed into a full blown global recession in late 2008 battered by continuous deepening and widening of the crisis. The recession created shockwaves though the global financial system and the global economy, and the advanced economies were affected most. The governments in these countries are bracing their financial sector and the real economy by stepping up various policy measures including injecting huge sums of money for bailing out the ailing financial institutions and other industries. What is worst is that the recession appears to hang on throughout 2014.

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