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Discussion Prompt #2
Your initial post should be 75-150 words in length.
The financial crisis was caused by several factors related to investments in real estate. Financial institutions lowered their standards for lending to prospective homeowners, and institutions also invested heavily in mortgage-backed securities. When home prices fell and mortgage delinquencies rose, the value of the mortgage-backed securities held by banks plummeted, causing some banks to fail and many others to restrict the flow of credit to business. That, in turn, contributed to a severe recession in the United States and abroad.
The financial crisis was caused by several factors related to investments in real estate. We have discussed a variety of reasons why the financial crisis occurred. Choose one of these reasons and discuss why you believe this reason was at the root of 2008 financial crisis and recession. In addition, discuss what legislation has been enacted to prevent this event from taking place in the future and causing another financial crisis.
Please provide original work. No plagiarizing.