How Risky Investments and Lack of Regulation Led to the Great Recession

In the years leading up to the global financial crisis of 2007, a perfect storm was brewing in the world of finance. A combination of factors, including the deregulation of the financial industry, the widespread use of subprime mortgages, the housing bubble, the over-reliance of financial institutions on risky investments, and a lack of government regulation, created a volatile mix that eventually led to the collapse of financial institutions, the bailout of banks, and a worldwide recession. The effects of this crisis were far-reaching, with widespread unemployment, a sharp decline in global economic growth, and long-lasting effects on the stability of the financial system.

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