Who's to blame for the 2008 stock market crash?
And these ten players had key roles... Mozilo served as cofounder and CEO of Countrywide Financial Corp. He's now widely regarded as the poster child of corporate misbehavior that led to the 2008 U.S. stock market crash. You see, Countrywide sold millions of mortgages to homebuyers with less-than-pretty credit histories.
What caused the 2008 financial crisis?
The housing market bubble burst. That created the banking crisis in 2007, which spread to Wall Street in 2008. 18 Deregulation in the financial industry was the primary cause of the 2008 financial crash. It allowed speculation on derivatives backed by cheap, wantonly-issued mortgages, available to even those with questionable creditworthiness.
What causes the stock market to crash?
If extreme events like a disaster, war, or pandemic occur, they can cause people to panic sell and cause a crash. A severe economic downturn can do the same. As a result, crashes are a regular part of the markets, although infrequent. The stock market crash of 2008 was a result of defaults on consolidated mortgage-backed securities.