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What are the causes of the financial crisis of 2008?
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The primary cause of the financial crisis of 2008 was a combination of excessive risk taking, poor regulation and oversight, and an unsustainable housing market. Risk-taking by banks and other financial institutions led to a collapse in confidence in the banking system, which resulted in a sharp decrease in liquidity and a sharp increase in interest rates. This caused a dramatic decline in asset prices, leading to a recession that lasted from 2007 to 2009. Poor regulation and oversight allowed banks to take on too much risk, and the housing market boom was fueled by easy credit and lax lending standards.