What is the main cause of the current economic crisis?

What is the main cause of the current economic crisis in the India?

• Answer:

  The Subprime Mortgage Crisis is an ongoing economic problem that has become more apparent in 2008 and has resulted in reduced liquidity in the global credit market and also the banking & financial systems. This crisis has exposed the weakness in the global financial system and also the regulatory framework that is overlooking them. Some of the reasons for this crisis are: 1. The US Real estate market crash 2. High default rates on Subprime loans & 3. Subprime Mortgage backed securities A Subprime loan is a loan that is granted to a borrower who does not qualify for loans owing to a variety of risk factors like low income level, bad credit history etc. The sub prime crisis began in the USA and because of our close import export relationship with USA the effects are evident in India also.