Bank Crisis

The Bank Crisis is periods of time were the banks couldn’t afford to make loans for their consumers. Or they can’t afford to keep any mortgages or can’t afford any consumer to stay at the bank.  One thing that can cause this is recession. Another problem can cause this is that people spend more money on things that they can’t afford. The finale problem I am going to talk about in this essay is the house booms and crashes.

The Recession causes a bunch of problems from losing jobs to the bank problems. The Recession makes banks go under by losing money. Banks lose money because people get greedy and they want to borrow more money from the bank from what they can afford. They continue this cycle and then the bank crashes and this is from people wanting and the bank letting.

People spending more money then what they can afford is one of the problems in the banking crisis. People want a bigger house then what they can afford so they go to the bank to ask for more of a loan or down payment. This is foolish because when they have to pay back the mortgage they can’t afford to pay it back. This is a big reason why the bank is going through a financial crisis is because they are lending more to people from what they can afford.

Another problem that caused the bank crisis is the house crashes. The reason why house gave problems to the banks is that when they let out more money to someone who can’t afford. People get Houses that cause them to get kicked out of their homes when they can’t afford them; the bank gets the house. Then they try to sale them but so many houses go under so they can’t make any money off the house. This is a big part of the financial crisis.

The bank crisis gets more foolish over the years. People ask more money from the bank that they can’t afford to pay back. This causes people to lose their homes and to lose what they own. So the banks try to sale them but they can’t because all of the houses went down under. This is a big reason why there is a recession. This is the reason why we have a banking crisis.