Sunday, February 12, 2012

How did the financial crisis move from country to country?

If you mean the crisis just gone, what happened was that banks in the US loaned money to people who were a bad risk, 'sub-prime loans' This meant when the interests rates when up many of them couldn't pay and so defaulted on their loans. So the banks didn't get their money back. But international finance being what it is many of these loans had been sold to banks in other countries so not just US banks are in trouble but banks in France, UK etc are in trouble too.

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