Question

Can you date the latest financial crisis in the United States or in Europe? Are there reasons to think that these crises might have been related? Why?

Short answer

Globalization and interconnectivity between markets is the reason for both crisis being related.

Step-by-step solution

Step 1. Introduction

A financial crisis occurs when the value of financial instruments and assets falls dramatically. As a result, businesses struggle to satisfy their financial obligations, and financial institutions lack the cash or convertible assets necessary to fund projects and meet immediate demands.

Step 2. Explanation

The financial crisis of 2008 was the last financial crisis faced by the united states and united kingdom. The crisis of 2008 was a global crisis and was related to one another. The factors contributing the same including the asset liability mismatch, mortgages of banks etc.

In the US, the collapse of the housing market bubble and insolvency of major bank contributed to trigerring of crisis. Globalization has connected markets across the globe, so the crisis in the US affected other markets as well.