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For several years the world’s economy was rising. After I and II World War the statistics and economic graphics has shown an enormous raise, but during the past few years these graphics have dropped a lot. Several weaknesses in the financial system worldwide have surfaced, the major one being the sub-prime collapse mortgage market collapse in the US. The financial crisis does not affect only countries under development but without exception all the world leading industrialized countries too.

But not only is the mortgage market collapse the main problem in the global financial system. Some financial instruments and products have become so twisted and complex that the whole system started to fail in a visible speed. These are well based technical explanations about the sub-prime mortgage market crisis, which was the engine of global financial stability breakdown. Everyone is having the same questions: how was that possible? How could a world leading power get into such a crisis?

The whole crisis started as an ordinary housing bubble. The qualification guidelines for getting a mortgage were getting tighter, banks refused money lending to unemployed people and those who were having bad credit report. But not only was the tightening the problem. In the early 2000’ there was an excess in the global capital. At this time no one would imagine a financial crisis is going to arrive; everyone was thinking about where to invest capitals in order to win, the general demand was high for low risk investment with nice return. The problem was in the low opportunities and chances in these types of investments; they were hard to find and due to secularization immense amounts of money were pushed into the US mortgage market. Brokers were giving mortgage loans to lenders, which then were sold to banks. Banks than have continued the selling, but this time to well known, high prestige investment firms, which collected thousands of mortgages and thousands of mortgage checks every month. To win more, investment firms sold mortgage check income shares to investors.

This was supposed to last for the whole life of a mortgage promising results no one could reject. For the great demand of assets these mortgage backed securities seemed like the perfect solution at first. Proven steady income, money in the bank and big down payments built out of mortgages was a safe investment. Everyone was happy and contented, but the problems started to show later.