The document summarizes the global financial crisis that began with the subprime mortgage crisis in the United States. Low interest rates and easy credit led many borrowers who could not qualify for prime loans to receive subprime loans. When housing prices declined and borrowers defaulted, banks suffered huge losses writing off subprime loans. This credit crunch spread globally as banks became wary of lending, slowing economies worldwide. The crisis demonstrates the need for regulatory frameworks to prevent unchecked greed from negatively impacting billions of lives.
