Global Economic Crisis - wjj

In recent decades, however, banks began selling mortgages to investors as securities (called mortgage-backed securities, or MBS).

In April 2007, New Century Financial, the second largest subprime lender in the United States, declared bankruptcy because the company was unable to pay its creditors.

In August 2007, BNP Paribas, the largest Eurozone bank, warned investors that they would be unable to withdraw money from several funds because of an evaporation of market liquidity.

Even with the injection of capital into the banking sector, several banks were unable to find the capital needed to remain solvent.

Some commentators warned of a possible depression, referencing the terrible economic problems which hobbled the world economy throughout the Great Depression of the 1930s.

In February 2009, U.S. president Barack Obama (1961–) signed into law a $787 billion economic stimulus package called the American Recovery and Reinvestment Act, which included expanded unemployment benefits, aid to states, tax cuts, and massive government spending on infrastructure projects, education, and health care.

In February 2009, U.S. president Barack Obama (1961–) signed into law a $787 billion economic stimulus package called the American Recovery and Reinvestment Act, which included expanded unemployment benefits, aid to states, tax cuts, and massive government spending on infrastructure projects, education, and health care.

On 30 September, the government of Ecuador was very nearly toppled by an apparent coup attempt by police who were angry at the government's cuts in bonuses and promotions.

Some participants favored handling such debt crises on a country-by-country basis, while others advocated the establishment of a Eurozone bond that would, in effect, amount to a subsidy for less wealthy nations.

Shortly after Davos, yields on Portuguese government debt reached new highs, reflecting concerns that Portugal might also require financial assistance to cover its debts.