Since the middle of 2007, the financial and investment industry has experienced several severe shocks – from the crisis in the subprime to a massive collapse of the derivatives market, and then the financial market as a whole.
Considering the fundamental causes of the financial crisis on a global scale, it should be noted that over the past decade, the world has seen a really unique in scale and duration economic growth. According to the IMF, world GDP from 1990 to 2002 increased by about 42%, and from 2002 to 2008 – by almost 34%. In this case, the volume of global financial assets investment institutions in 2007 exceeded the world GDP ten times. Disproportionate increase in the volume of world GDP and financial assets can be attributed to an increase in asset prices, liberalization and rapid development of the credit market and the like. This phenomenal growth of the financial sector and the global economy in the context of globalization could not take place without causing imbalances that do have consequences for the global economic and financial industry.
The economic rise of the last decades was accompanied by a sharp rise in prices for raw materials and energy. The rise in energy prices led to a transfusion of financial resources from private industry in developed countries to the countries – exporters of oil and natural gas. The status of the US as the undisputed leader in global financial markets confirms the view that the origins of the global crisis must be sought in the US economy. In our opinion, the origin of the current financial crisis must be sought in the United States in the second half of the 1920s, when a third of the population of the country has become a participant of the stock market, which was in a state of constant fluctuations and crises. Even then, the US stock market was overheated.
Analysis of the current situation on the financial market in the US shows that the collapse of the mortgage market as a result of growth of bad loans to insolvent borrowers, from August 2007 to August 2008 was the root cause of the deployment of the crisis and contagion spread to other countries.
