Background of the global financial crisis; What is it about? It all started with the dream of every American, that every American should have a home. No matter who you are or what you do, if you're American, you should have something called a home. The real estate industry was booming and financial agents thought there was no better time to provide loans. The household sector was boosted by the increased money supply provided by commercial finance companies, and people obtained loans regardless of their credit score. It was not expected that the real estate boom would come to such an abrupt end and that prices would reach historic lows. The American economy, being a capitalist economy, did not bother to indulge in the policies pursued by the then prominent financial giants. Gradually, these financial giants of the sector began to feel the pressure as subprime clients began defaulting on their loans. The properties mortgaged by clients did not even cover the principal amount of the loan, let alone the interest commitments. Credit offered to people indiscriminately, meeting short-term goals and ignoring warnings from leading economists about the long-term sustainability of the policy, backfired completely and companies like Lehmann Brothers, Merill Lynch , Freddie Mac and Fannie Mae have reached magnanimous “bad assets”. proportions. The economy experienced a severe credit shortage and simultaneous negative effects began to occur. The credit crisis led to a rise in market interest rates, a slowdown in business investment policies, a decline in production, an increase in layoffs, a decrease in consumption and a downward spiral for entire economy. The U.S. unemployment rate hit a record high of 6.1% and industrial growth saw its biggest decline in the last three years and fell to 1.1%. American governments realized the seriousness of the situation and began to use monetary and fiscal policies to curb the decline of the economy. Fiscal policy was boosted to the extent that an amount of around $1 trillion was injected into the economy to increase the liquidity scenario. Financial companies that filed for bankruptcy were nationalized or their non-performing assets were booked by the government. The Federal Bank of the United States has also lowered monetary policy rates, such as the statutory liquidity ratio (SLR), relating to the amount of money that must be deposited by commercial banks with the federal bank, in order to control the extremely high interest rates..