what caused the financial crisis?

In my opinion its just due to corruption in many sectors , like banking sectors,real estate business sector where just due to corruption todays finance has got so much unbalanced.

Banks agree to give huge huge amount of loans to those who are just fraud as the party anyhow gets loans in crores from the bank ....How it happens ! while one sincere fellow dont get loan even after showing all documents along with cllaterals tooo.As its just corruption where bank manager himself get huge money from the fraud party.

Similar is the case in real estate as the land owner never ever think about his client from whom he gets money.Now a days ther are many cases where the land owner play trcks along with bankers help and the party who think about his dream home all goes in vain.

The financial crisis is for common people and not for bankers and real estate businessman .As they enjoy playing with life of common person.They are just like demons in human face!!!!!!!!!!

I think its because of housing market decline, the housing slump set off a chain reaction in our economy. Individuals and investors could no longer flip their homes for a quick profit, adjustable rates mortgages adjusted skyward and mortgages no longer became affordable for many homeowners, and thousands of mortgages defaulted, leaving investors and financial institutions holding the bag.This caused massive losses in mortgage backed securities and many banks and investment firms began bleeding money.

Yes, these massive losses caused many banks to tighten their lending requirements, but it was already too late for many of them... the damage had already been done. Several banks and financial institutions merged with other institutions or were simply bought out. Others were lucky enough to receive a government bailout and are still functioning. The worst of the lot or the unlucky ones crashed....