The global financial crisis is happening today is very closely related to the deteriorating condition of the American economy. The financial crisis that occurred in the United States has developed into a serious problem. Shocks that occurred in the superpowers they are determined to have an impact on the world economy. Economic upheavals that occurred in the United States have affected global economic stability in some regions. Economic openness between countries, allowing the onset of recession in one country to lead and influence other nations. The financial crisis that occurred in the United States stems from the crisis housing loans in the United States. The United States in 1925 has set the law on Mortgage (Housing). The regulation is related to the property sector, including home loans that provide convenience for the creditors.

Loan facilities are also happening at the property prices in the U.S. is experiencing an increase. This was also followed by speculation in this sector are increasing. Problems arise when many financial institutions lending the property in the United States disbursed loans to people who actually are financially not feasible to obtain the credit to the people who do not have the economic ability to meet the credit that they do.

The situation triggered the credit crunch in the property sector (subprime mortgages). Non-performing loans in the property sector resulted in a domino effect that led to the bankruptcy of several financial institutions in the United States. This is because the institutions financing the property sector generally borrow short term funds from another party, usually a financial institution. Assurance that the company provides mortgage financing property is debt (subprime mortgage securities) are sold to investment institutions and investors in various countries. In fact, bonds are not backed by collateral that the debtor has the ability pay for good mortgage. » Read more: Causes of Global Financial Crisis