The 2008 Financial Crisis, the Arab Spring, and the Rise of Populism

The global financial crisis originated in the U.S. subprime mortgage market during 2007-2008, when the prior expansion of mortgage credit, combined with the securitization of debt, generated a significant housing bubble. The collapse of the investment bank Lehman Brothers in September 2008 marked a decisive turning point, and the crisis spread rapidly to the global financial system due to the interconnection of international capital markets. Numerous governments implemented massive financial bailouts, and central banks, including the U.S. Federal Reserve, implemented unprecedented expansionary monetary policies, including near-zero interest rates and "quantitative easing" programs. The crisis triggered a severe global recession, with significant GDP contraction in 2009, rising unemployment, and a subsequent sovereign debt crisis in the eurozone; it is considered the most severe economic crisis since the Great Depression of the 1930s, and it prompted regulatory reforms such as the Dodd-Frank Act and the Basel III accords, as well as protest movements such as "Occupy Wall Street."