What caused the global financial crisis (GFC)? It was the first global financial crisis since the Great Depression of the 1930s; it has spread at an unprecedented rate across the world (Claessens et al, 2013). In the aftermath of the Great Depression, economists universally believed that unregulated financial markets were to blame, because they were fundamentally unstable, prone to manipulation by bankers, and capable of triggering deep economic crises and political and social unrest (Crotty, 2009). . These are the same problems that occurred in the wake of the 2007 financial crisis. It can be argued that the current crisis is the latest stage in a series of financial boom and bust cycles, during which there are a transition from a light financial market to a tight financial market. regulations. The global financial crisis (GFC) is considered the deepest recession since World War II (Blankenburg and Palma, 2009), with the United States being the epicenter of the crisis due to the bursting of the housing bubble and subprime mortgages (McKibbin and Stoeckel). , 2010). This essay will focus on the housing bubble, subprime mortgages and the interdependence of the global banking system, lack of transparency and regulation within the financial sector as the main causes of the GFC. One of the causes of the GFC was After the housing bubble, during which house prices rose sharply in the United States, these house price trends were similar to other crises major financial issues of the 20th century (Claessens et al, 2013). In the early 2000s, housing was the new investment and a global boom. Low interest rates have encouraged households to view homeownership as the quickest way to build wealth, rather than waiting for savings to accumulate. Prices in the US real estate market are middle of paper......and lack of regulation within the financial sector as applicants with high credit risk have been given unstable loans. This led to the bursting of the housing bubble in the United States in 2007 as many borrowers were unable to pay their mortgages on their homes, leading to a large number of foreclosures and houses entering the market, which led to a decline in housing prices. prices creating a vicious circle. The interconnectedness of the banking system has made it more exposed to risk, which explains why the bursting of the housing bubble in the United States and the collapse of Lehman Brothers on Wall Street impacted economies around the world. , especially in Europe, in addition to the fact that interbank exchanges and loans have stopped. The lack of transparency and regulation meant that bankers were able to exploit and manipulate the financial system without being held accountable..