What caused the global financial crisis (GFC)? This was the first global financial crisis since the Great Depression of the 1930s; it has spread at an unprecedented rate throughout the world (Claessens et al, 2013). In the aftermath of the Great Depression, economists universally believed that unregulated financial markets were to blame because they were fundamentally unstable, subject to manipulation by bankers, and capable of triggering deep economic crises and political and social unrest (Crotty, 2009). . These are the same problems that occurred in the aftermath of the 2007 financial crisis. It can be argued that the current crisis is the latest phase in a series of financial boom and bust cycles, in which a shift from financial markets occurs light to tight financial markets. regulations. The global financial crisis (GFC) is seen as the deepest post-World War II recession (Blankenburg & Palma, 2009), with the United States as the epicenter of the crisis due to the bursting of the housing bubble and subprime mortgages (McKibbin & Stoeckel, 2010 ). This essay will focus on the real estate bubble, subprime mortgages and the interconnectedness of the global banking system, lack of transparency and regulation in the financial sector as the main causes of the global financial crisis. One of the causes of the global financial crisis was During the housing bubble, in which house prices rose sharply in the United States, these house price patterns were similar to those of other major financial crises of the twentieth century (Claessens et al, 2013). By the early 2000s, housing had become the new investment in a global boom. Low interest rates have encouraged families to view homeownership as the fastest way to acquire wealth instead of waiting for savings to build. US housing market prices are ..... half of paper ......d the lack of regulation in the financial sector, as high credit risk applicants have been given unstable loans. This led to the bursting of the housing bubble in the United States in 2007 as many borrowers were unable to afford the mortgages on their homes, which led to a large number of foreclosures and homes being put on the market, which in turn led to a decline in real estate sales. prices creating a vicious circle. The interconnectedness of the banking system has made it more exposed to risk, which explains why the bursting of the US real estate bubble and the collapse of Lehman Brothers on Wall Street had a ripple effect on economies around the world, particularly in Europe , as well as the fact that interbank trading and lending have stopped. The lack of transparency and regulation has meant that bankers can exploit and manipulate the financial system without being held accountable.