How credit markets contributed to the credit crunch of 2007.

The first 200 words of this essay...

How credit markets contributed to the credit crunch of 2007

Abstract:

This article try to discuss the relationship between credit market and the 2007 credit crunch. Because the 2007 credit crunch is special started with subprime credit, and one of the reason is the overactive credit market. And after the credit crunch burst, the credit market is stroked heavily. So it is necessary to find the relationship between credit market and credit crunch.

1. Introduction

Since 2007, many banks, insurance companies, enterprises failed in their business, big investment banks have to announce to go bankrupt or have to required substantial government assistance, even countries are facing a crisis of bankrupt. The whole world's economy stepped into a bad situation. The global credit crisis has occurred as major parts of the credit market have failed to function normally leading to failures of financial institutions because they were unable to obtain funding from the market. Credit market plays an important role in this disaster. On one side, credit market develops rapidly that help the economy get great boom. Credit market making it easier for credit risks to be borne by those who are in the best position to