Australia and the Financial Crisis

The global financial crisis begun in July of 2007, and was caused by two main reasons The credit crunch and the sub-prime crisis. The global financial crisis began with credit crunch when the US investors begun to lose confidence within the share market, and the banks begun a reduction in the availability of loans, so many people turned to subprime lenders. Banks usually stop lending activity because of the anticipation of a decline in the value of collateral, being used by the banks. A credit crunch is often caused by a couple of reasons, such as careless and often inappropriate lending which results in losses. Or by a price collapse, when there is a decrease in market prices after a period of over inflated assets. They were the major causes of the global financial crisis's credit crunch as house prices begun to rise with inflation, banks begin to hand out careless loans, and when the market price lowered and people couldn't repay the loans. The bank began losing money in the form of assets and collateral, as the house or collateral is worth less than the original loan.
Subprime Lending is a financial term and refers to when a lending organization or business gives loans to people, who don't have the equity to get a loan from a bank   because they may not have means of repayment or are in unstable jobs. The sub-prime crisis occurred when the housing market in the U.S suffered greatly and begin a downfall as many home owners who took out loans from sub primes, could not repay their mortgage. The value of homes fell and many home loan borrowers now have a negative equity. The credit crunch is now a part of the subprime crisis, as banks that now repossessed houses and assets were losing money as they were worth less on today's market. Now giving and holding loans became increasingly difficult because the banks now have a liquidity crisis.
After the Subprime crisis and the credit crunch, the global financial crisis began to worsen. The two main indicators that...