Housing Policy, Monetary Policy, and the Great Recession

Investigating the Financial Crisis in 2008 from the Perspective of Banking Systems

“…The deregulation of financial markets has accelerated the development of financial market and economic prosperity in the US. However, banks have become increasingly greedy driven by enormous benefits which encouraged banks to take more speculative excess activities and ultimately contributed to the meltdown of financial market in 2008 [5,12] . D e s p i t e n e g a t i v e i n f l u e n c e s b r o u g h t b y t h e deregulation, it does not mean that the deregulation of the financial market is totally wrong.…”

“…At that moment, Andrew W. Lo described this crisis in his research paper as "the worst economic recession so far" [1] . In order to prevent the recurrence of such crisis, numerous researches have been carried out to study the underlying causes of this tragedy since the outbreak of the financial crisis, aiming to find out solutions to improve financial systems as well as regulation mechanisms [2][3][4][5] . According to the results given by these researches, one of the primary causes that led to financial crisis was related to the flaws existing in the banking system [6] .…”