Top 10 World’s Biggest Financial Crisis

A financial crisis occurs when there is an unbalance in the economy of any country. It can affect the fall in output, currently down etc. Some crisis has been occurring since BC and continued on different levels. Now everyone wants money, and those who already have enough, wants a little more whether they care to admit it or not.

The rise of Capitalism improves the living standards and greater prosperity, but this system goes wrong. Now all the country is interconnected through stock markets and if a crisis occurs in one country then it gets transmitted to all other like a communicable disease. Here is the list of top 10 World’s Biggest Financial Crisis.

10. The .Com Bubble

dot-com bubblePhoto credit: Wikimedia commons

This crisis is related to the internet based companies that have a massive rise in stock values of industrialized nations from 1995-2000. The crisis began because of the easily available service in 1997-1998, in fact many of the services were freely provided.

All the internet system is programmed to change only last two digits in place of the year. On the next day of 31st December 1999, the date should be changed to 1st Jan 2000 but it changed to 1st Jan 1901.

This mistake crashed the whole internet connection. Most of the dot-com companies are closed after finishing off their venture capital because they never made any profit.

9. Wall Street Crash

wall street crashPhoto credit: Wikimedia commons

Wall Street Crash began in October 1929 in United States. That day is also known as Black Tuesday or the stock market crash of 1929.

All people believe that the stock market would rise quickly and millions of stocks were purchased at the time. The economy was not doing well in the late 1920s because millions of dollars are already spent on World War I.

More than 4000 banks were bankrupted and thousands of unemployed people start marching on the road. The oversupply of wheat depressed prices and farmers and the stock market crashed.

8. Black Monday

Black MondayPhoto credit: Wikimedia commons

Black Monday began on 19 October 1987. On that day, the stock market crashed all around the world. First the crash started in Hong Kong and spread to Europe.

The Dow Jones dropped by 22% and it takes almost 2 years to reach previous level. Due to this crisis, many small level stock holders lost lots of money. The origin of the crisis began in Hong Kong whereas the program trading was more prevalent in the US.

7. Swedish Financial Crisis

Swedish Financial CrisisPhoto credit: Wikimedia Commons

In 1985 Sweden frees its stock market from all the government regulations. Between 1990-1994 more than 90% banking sectors are gone in massive losses including many large banks in Sweden.

The government bailed out the banks and extended a guarantee to those banks which kept the consumer up. At that time, the GDP of the country went down to 2% and to recover from the crisis, the government privatized all the banks.

6. The Great Depression

The Great DepressionPhoto credit: Wikimedia commons

It started in 1930s and was one of the biggest crises of the 20th century. Many countries were affected by low output, high unemployment ratio and fall in trade. The major factor in this crisis was the Wall Street in 1929 which caused many US citizens to lose their incomes.

This crisis affects many countries including Canada, US, Chile, China, Germany, Japan and some Russian countries. Some part of the economics started to recover in the mid of 1930s and this crisis fully recovered by the mid-1940s.

5. 1973 Oil Crisis

World's Biggest Financial Crisis - 1973 OilPhoto credit: Wikimedia commons

In 1973 the member countries of OPEC declared oil as an official ban trade. This was made especially for the the US and Netherlands. But it lasted only for a few months but in six weeks, the NYSE shares lost $97 billion. Later on the President of the US created the department of energy which developed the United States strategic petroleum reserve.

After one year of the crisis, the United Nations create a new order which stated that the resources would be distributed with equity.

4. Northern Rock Bailout

Northern RockPhoto credit: Wikimedia commons

When a large number of mortgage holders with bad credits in the US defaulted on their loans then many institutions became cautious about lending one another money. Finally the liquid assets went down and the interest rates went up.

In the first six months of 2007, the bank lost more than $650 million and had a loan of $11 billion from the Bank of England. The decision to rescue northern rock bank in 2007 is expected to cost more than 2 billion pounds to the UK taxpayer.

3. Russian Financial Crisis (1998)

Russian economy Photo credit: Wikimedia commons

In 1993 the Russian government came up with GKO’s to better finance the country. GKO were based on currency exchange. The government owed workers roughly $12.5 billion in unpaid wages. It also made more money from GKO than taxes.

They spent money on many social services. The rise in oil prices in 1999-2000 that helped Russia to finally have a trade and domestic industries.

2. 1997 Asian Crisis

Asian Crisis Photo credit: Wikimedia commons

Asian Crisis started in a small country, Thailand in 1997. Between 1980 and 1990 the country had experienced wide expansion in economics. The government had maintained the fixed exchange rates for its currency. As a result, exports fell and the stock market crashed and it spread all over the Asian countries.

It was believed that this crisis created by not trading technology. The International Monetary Fund starts a $40 billion program to recover the financial situation of all countries.

1. 2008 Crisis

2008 CrisisPhoto credit: Wikimedia commons

Recommended: 15 Poorest Countries in the World

The crisis of 2008 considered as the worst crisis ever in the word. The easy availability of credit propelled greater after demand for housing and when this ends, there was a big loss in housing prices. The economy had already begun to affect since 2006 and this decline in investment spread to consumer goods in 2008.

There are many causes suggested for this crisis including the role of different interest rates. This is the biggest crisis ever because the problem of unemployment is still present even in the USA.

Written by
Varun Kumar

Varun Kumar is an experienced science and technology journalist interested in machines, AI, and space exploration. He received a Master's degree in computer science from Indraprastha University. To find out what his latest project is, feel free to directly email him at [email protected] 

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