Biggest Crisis in world

Sub prime Crisis
Lehman Brother Crisis

Sub prime crisis, that shook the world on 27 Nov, 2007, this reason behind that crisis was skyrocketing property prices in US. The real estate market was booming in US. Banks were rushing to give the housing loan to borrowers without being much concerned about their past records. There are two kinds of borrower, Prime borrowers are those whose past record is good while subprime borrowers were those either they were not willing to pay back the loan or were not having stable income. Banks were charging high interest rate to the subprime borrowers.So many lenders got into that business and given mortgage loan to borrower they thought that even if borrower will not pay, banks will sell their property, and will manage to earn profit. But housing prices went down, banks had no buyer for that property and borrowers started to make the default and they declined to pay even low interest rate in this way so much debt accumulated.
This subprime Crisis led to lehman bankrupcy, Lehman Brother was US fourth largest investment bank, a 158 years old institution, was filed bankrupt on 15 sep, 2008 by US Fed Reserve, the reason being above sub prime Crisis and poor relations with US top banks. There were no buyer for Lehman brother. Bank of America ad Barclays had turned down the offer of buying it because in past Lehman failed to maintain good relation with these banks. So Fed Reserve left with no option except filing it Bankrupt. This is Biggest bankruptcy in the history of US. Because of these crisis entire global economy gripped by Recession.