The 2008 financial crisis was a result of various factors intertwined within the finance industry and the broader economy. The crisis can be attributed to the following key elements:

1. **Deregulation in the financial industry:** Deregulation allowed banks to engage in risky practices such as hedge fund trading with derivatives. This deregulatory environment created a lack of oversight and contributed to the excessive risk-taking by financial institutions.

2. **Subprime mortgage market:** The growth of the subprime mortgage market, which began in 1999, played a significant role in the crisis. Fannie Mae and Freddie Mac facilitated access to home loans for borrowers with low credit scores and higher risk of loan defaults.

3. **Subprime mortgage crisis of 2007:** The subprime mortgage crisis, which emerged in 2007, acted as a catalyst for the broader financial crisis. Increasing defaults on home mortgages led to a decline in the value of mortgage-backed securities (MBS). These securities were often misrepresented as safe investments, attracting lenders who relied on flawed risk ratings.

In summary, the financial crisis of 2008 was caused by a combination of factors, including deregulation in the financial industry, the growth of the subprime mortgage market, and the subsequent subprime mortgage crisis. These elements collectively contributed to the collapse of mortgage-backed securities and had a profound impact on the stability of the global financial system.
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