The deleveraging of financial institutions led to the financial crisis of 2007-2008 sometimes also referred to as the _____.
A)stock crisis
B)debt crisis
C)stock market bubble
D)bank run
E)credit crisis

Question

Quizplus · Accepted Answer

The deleveraging of financial institutions resulted in a reduction in credit availability, leading to a credit crunch and a subsequent credit crisis. This led to the collapse of several financial institutions and ultimately to the global financial crisis of 2007-2008. Therefore, the best choice is E, the credit crisis.

The Deleveraging of Financial Institutions Led to the Financial Crisis