The Cause of the Great Recession

The Great Recession was caused by many different issues. The problem that led to the Great Recession was that the there was a lack of regulations, which included a lot of financial firms not acting conservatively and taking on took many risks; the federal reserve failing to control bad mortgages; and policymakers that were not well informed on the current economic situation. The main reason was the crash of the housing market. The issue was that too many people had mortgages on sub-prime mortgage rates, that they could barely afford. When the housing bubble crashed the rates skyrocketed creating a financial crisis. In all experts believe that the Great Recession was avoidable if there were better planning and observations.