The basis of the crisis which recently have shaken the economic markets were speculations on the mortgage loans in the USA. Firstly, American banks have started to provide mortgage credits at a much more favourable terms than in the past increasing the sums and requiring less security. Secondly, have begun to issue debentures (getting free cash to invest) using the mortgage as a pledge - assuming that these loans will be repaid. At one point, occurred that the number of so-called ‘bad credits’, so these which owners have problems with regular payment of the debt or aren’t paying them at all, have begun increasing. Dramatic decrease of prices of flats and houses have influenced it. People in difficult financial situation have started trying to get rid of their houses to give back the money to the banks, but by the violent loss of their value the money given to the owners have covered only a portion of the debts. Therefore, not only the collapsed market for mortgage loans, but banks and investment funds were in trouble because they have invested big money in bonds, which the loans were secured by mortgages. Since most operations in the financial markets now is the transfer of capital (and not for example invests in new jobs and technologies) the effects of this crisis started to feel all the existing players in the markets - from pension funds after the insurance companies.
When the crisis have begun the government of the United States have started to implement its programme of awarding financial aid, especially to investment banks. The most commonly it lies on giving loans from the state budget to companies which have lost liquidity. Reasoning for such procedure is a general concern about the state of the economy (frequently next banks collapse) and to protect the jobs. Another way is to control blocks of shares redeemed at risk companies, which maintain their liquidity but also leads to the situation when state takes control over them, that is the lead to their nationalization. It is what happened with American International Group (AIG) - leader in the insurance and pension funds as well as a significant player in the financial market, where the U.S. government bought a package of 80% of the shares gaining managerial control over staffing and the creation of policies the company. This situation reminds some solutions which were applied in the middle of the 80-year, when the U.S. defense industry was in trouble and the U.S. government's intervention saved among others Northrop-Grumman.
See also:
US to tackle financial crisis - BBC
and
Financial crises: Lessons from history
