Even with the reforms that were introduced in the Great Depression and afterward, bank panics can happen again. This chapter provides a comprehensive overview of the 2008 financial crisis, which involved investment banks instead of commercial banks and which resulted from the housing bubble; and explains decisions the US government made during this time. The US crisis led to a global crisis within hours and days, as banks stopped lending to one another and people became unemployed. There was no depression this time, because the Federal Reserve lent money to banks so that they could continue to lend money to prevent businesses from collapsing.

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