There were many contributions that led to the 2008 financial crash. Both parties, being the congress/regulators ignored various warnings and could have possibly prevented the fall. As So many of the investors were clouded with greed, that they were willing to do anything to make more money especially if they didn't have to put much effort into achieving so. As Frank Partnoy stated in the movie Inside Job "you're going to make an extra $2 million a year, or $10 million a year for putting your financial institution at risk. Someone else pays the bill, you don't." The 2008 crash caused unemployment to triple and banks to collapse, leaving millions of people all over the world in debt and devastated. When it came to money and politics people didn't care about anyone else but themselves. The "housing bubble" was one of the main factors that initially led to the crash, many people who were considered to have "bad credit" were offered mortgage because house prices were rising and it looked possible for them to continually rise. Deregulation of acts such as the Glass-steagall act which separated regular banks and investment banks, enabled these banks and investors to make highly risky decisions with peoples money and savings. Banks and private lenders could care less whether these people could pay their mortgages or not, either way they were selling these mortgages to bigger banks. .
With an increase in house prices, people then needed to ask for higher loans. Since almost anyone could get a mortgage there was a higher demand for houses. Which led banks and lenders to think that if people did not pay there mortgage their houses could be repossessed for a lot more. The double effect of this new change made these consumers very confident that the cost of there home was rising so they would spend more money. Banks were always very cautious, they would borrow money from somewhere else and so would those lenders, causing a chain effect.
