The 2008 global financial crisis was caused by excessive risk taking and insufficient regulation of complex financial products like mortgage-backed securities in the US housing market. This caused falling home prices, bad debts, and a crisis of confidence that spread globally. The impact was a severe global recession, falling stock markets, reduced trade and job losses. The 2020 crisis was triggered by the COVID-19 pandemic which caused a global economic slowdown due to nationwide lockdowns and disruptions. Other factors included an oil price war between Russia and Saudi Arabia and stock market crashes. The impact has been high losses for many industries like aviation and tourism, as well as increased prices, slowed global trade, and a major worldwide recession.

1. GLOBAL CRISIS 2008 VS GLOBAL
CRISIS 2020 (CURRENT)
SUBMITTED BY ARTI
SHARMA
SECTION B, ROLL NO
PG19027
INDIAN FINANCIAL SYSTEM
SUBMITTED TO PROFESSOR
USHA

2. GLOBAL CRISIS
2008 VS GLOBAL
CRISIS 2020
(CURRENT)
• WHAT WAS THE
CRISIS?
• WHAT WERE THE
CAUSE?
• IMPACT OF CRISIS
ON THE WORLD
ECONOMY?

3. WHAT WAS GLOBAL CRISIS 2008
 The global financial crisis (GFC) refers to the period of extreme stress in global
financial markets and banking systems between mid 2007 and early 2009.
 During the GFC, a downturn in the US housing market was a catalyst for a
financial crisis that spread from the United States to the rest of the world
through linkages in the global financial system.
 Many banks around the world incurred large losses and relied on government
support to avoid bankruptcy.
 Millions of people lost their jobs as the major advanced economies experienced
their deepest recessions since the Great Depression in the 1930s.

4. WHAT IS GLOBAL CRISIS 2020
Stock Market crash could be seen from 20 February
2020
Corona outbreak globally firstly started in China,
declared pandemic by WHO
Wars between some countries for various reasons
that affects global economy

5. CAUSES FOR CRISIS 2008
 Excessive risk-taking in a favourable macroeconomic environment by
USA
 Increased borrowing by banks and investors
 Insufficient Regulation of institutions that created and sold the
complex and opaque mortgage backed securities (MBS)
 Errors in policy made for MBS and other loans
 Catalyst for GFC were falling US house prices and raising number of
borrowers unable to repay their loans

6. CAUSES FOR CRISIS 2020
 The biggest cause is corona virus, a
pandemic outbreak worldwide
 Lockdown of countries
 Oil price wars between Russia &
Saudi Arabia
 Stock market crashes

7. IMPACTS OF 2008 CRISIS ON WORLD ECONOMY
 Stresses in financial system because of bad debts/loans
 Spillover to other countries, as US banks also had substantial operations in
other countries
 Failure of financial system, panic in financial markets
 Central banks lowered interest rates rapidly to very low level
 Global recession occurred
 Government spending increased to stimulate demand and support employment
throughout economy
 Adverse affect on international stock market
 International trade slowdown
 Stronger oversight of the financial firms

8. IMPACTS OF 2020 CRISIS ON WORLD ECONOMY
 Stock market graph declined
 Very high loses for almost all the businesses like Aviation industry,
Travel & tourism industry, which are very adversely affected
 Huge loses of lives worldwide
 Oil prices lower down
 Imports and exports rate decreased
 Prices of goods and services increased
 Slowdown in world’s economy

9. SUGGESTIONS
 Proper regulation of
mortgage backed securities
 Stronger policies should
require to control MBS and
other loans
 Do not take excessive risk
even if the macroeconomic
environment is favourable
2020 crisis2008 crisis
 Take proper preventions set by
WHO against covid-19 (washing
hands, wearing masks,
quarantine etc.)
 Control the disease in initial
phase so to avoid it becoming
pandemic
 Be prepare very solid for any
uncertainty
 Global networks should be more
vocal
 Avoid wars and do settlement,
because an eye for an eye the
worlds go blind
 Find out the vaccine as well as
curable medicine asap for
corona virus