It has been 10 years since the start of the financial crisis, but its consequences are still being felt. Weak economic growth is observed in most countries.
In August 2007, French-based BNP Paribas froze three of its funds invested in mortgage-backed securities. The decision followed three years of a rapid blowing of the high-risk mortgage bubble. Since the early 2000s, Americans with low incomes and bad credit history received these loans. Then their mortgage obligations were sold in the derivatives market, inflating the stock market.
In August 2007, investors started to sell off these papers. In September 2007, Northern Rock, the largest mortgage lender in Britain, found itself unable to fund its mortgage book and saw its customers queuing to withdraw their deposits. The bank filed for bankruptcy. But that was only the beginning. A year later, top US investment bank Lehman Brothers declared bankruptcy.
