The Financial Crisis

The financial crisis happened because banks were able to create too much money, too quickly, and used it to push up house prices and speculate on financial markets.

1. Banks created too much money…

Every time a bank makes a loan, new money is created. In the run up to the financial crisis, banks created huge sums of new money by making loans. In just 7 years, they doubled the amount of money and debt in the economy.