What major economic event began in 2008 and led to a global financial crisis?

The major economic event that began in 2008 and led to a global financial crisis is indeed linked to the Housing Market Crash, making it a pivotal moment in economic history. The crash was primarily caused by the collapse of the housing bubble — a rapid increase in home prices fueled by speculation, easy credit, and subprime mortgage lending practices. As housing prices soared, many borrowers, including those with less-than-stellar credit histories, were given loans that they ultimately could not repay.

When housing prices began to decline, it triggered a wave of foreclosures and a sharp increase in mortgage defaults, which had a devastating effect on financial institutions that held these bad loans. This led to a crisis of confidence in the banking system and wider financial markets, causing significant economic downturns both in the U.S. and globally.

While the Great Recession refers to the overall economic decline that followed the crash and includes various effects stemming from it, the specific event that initiated this crisis was the Housing Market Crash. Consequently, acknowledging the impact of this housing market turmoil is crucial for understanding the causes of the subsequent recession and financial instability experienced worldwide in 2008 and beyond.