Bungled Banking: Finance Industry Failures Explained
Early Financial Industry Failures
The upcoming fiascos were foreshadowed in 2007 when lawmakers realized the great problems facing the banking financial industry. The mortgage industry was turning sour and carried a viable risk of taking the rest of the banking finance industry with it. Throughout the summer of 2007 and until the end of the year, the Federal Reserve and U.S. government put great resources towards avoiding a mortgage crisis of bad loans and foreclosed homes.
Developments of 2008
Throughout early 2008, the Federal Reserve sold billions of dollars to commercial banks on the brink of bankruptcy. Still, foreclosures continued in scarily high numbers and in February President Bush initiated Project Lifeline which would give foreclosed homes a 30 day reprieve. For the remainder of 2008 and President Bush's tenure, the Federal Reserve and U.S. government tried, to no avail, to save the deepening mortgage and credit crisis of the banking finance industry.
State of Financial Affairs in 2009
As President Obama took office it seemed that the worst was over. Foreclosures had already reached all time highs and the crisis stretched far beyond Wall Street and into the daily lives of many Americans. In February 2009, Congress passed a large economic stimulus plan expected to rectify the failures of the banking finance industry. It is likely that the stimulus plan will help return normalcy to the American economy after weathering the failures of the banking finance industry.