áverkabylgju

Áverkabylgju, also known as the "Great Recession" or "Global Financial Crisis," was a severe worldwide economic downturn that began in late 2007 and lasted until mid-2009. The crisis was triggered by the collapse of the U.S. housing market, which led to a significant decline in home prices and a sharp increase in defaults on subprime mortgages. This, in turn, caused a liquidity crisis in the financial sector, leading to the failure of several major financial institutions and the near-collapse of the global banking system.

The crisis had its roots in the late 1990s and early 2000s, when financial institutions began to engage in risky lending practices, particularly in the subprime mortgage market. These loans were extended to borrowers with poor credit histories, often with little regard for the borrowers' ability to repay. As home prices began to fall in 2006 and 2007, many of these borrowers defaulted on their loans, leading to a wave of foreclosures and a sharp decline in the value of mortgage-backed securities.

The crisis spread rapidly across the globe, causing a sharp decline in global trade and investment, and leading to a significant increase in unemployment and poverty. The crisis was exacerbated by the failure of several major financial institutions, including Lehman Brothers, Bear Stearns, and Merrill Lynch, which led to a loss of confidence in the global financial system.

In response to the crisis, governments and central banks around the world implemented a series of stimulus packages and monetary easing measures to stabilize the economy and prevent a deeper recession. These measures included low-interest rate policies, quantitative easing, and direct government spending on infrastructure and other public works.

The crisis had a profound impact on the global economy, leading to a significant decline in GDP, a sharp increase in unemployment, and a prolonged period of economic stagnation. The crisis also highlighted the interconnectedness of the global economy and the need for greater financial regulation and oversight to prevent similar crises in the future.