Recent Credit Problems in the Financial Markets Essay

Recent identification Problems in the Financial Markets - Essay ExampleCertainly, since then, this crisis gave way to far-reaching alterations in the Western economies. Still a abundant range of questions remain unanswered. People still doubt as to the possible outcome of the integration of external economies and the potential limitations of the free market system in the times to come (Larry, Teather & Treanar 2010). During the beginning of the credit noise in the financial markets, commoners and experts doubted as to the validity of the capitalism in a highly globalized and interdependent foundation (Larry, Teather & Treanar 2010). The effigies of bankers were put to flame in mass protests. The skyrocketing interest rates in the United States pushed many lower-middle-class homeowners affiliated to sub-prime mortgages to default on their financial commitments towards their lenders. The news eventually spread like a risky and uncontrollable wildfire as the banks and financial in stitutions desperately cringed from extending further loans. The statutory bodies and organizations started to pump massive funds into their economies to transgress the fast-widening crisis of trust in the financial markets. The small investors begin queuing before the local bank branches to withdraw their savings and investments at the earliest. The situation was marked by a sense of chaos, right from the domestic kitchens to the plush offices of the top-notch banks.The ramifications of the drying up of credit sources were immense. Banks and financial institutions collapsed like packs of cards.