In has been almost three years since the global financial crisis that started in the United States which was due to housing subprime lending, meaning that loans were being made to people who had difficulty maintaining the repayments on schedule. According to Bernanke (2009:01), “the proximate cause of the crisis was the turn of the housing cycle in the Untied States and the associated rise in the delinquencies on the subprime mortgages, which imposed substantial losses on many financial institutions and shook investor confidence in the credit market”. What happened was that the housing crisis began because too many people made loans and ended up being unable to pay off their mortgage payments because the banks had trick them into believing they could pay back their mortgage even though they were high rise candidates. “Home loans were created with adjustable rates and promises to hold off payments for two years, giving consumers false hopes that their homes would more affordable in the future. When the future came, those people were unable to make payments and foreclosures spread across the country like a wildfire” writes Munday (2010:01). Meaning that the average US family only owned a small percentage of their home while the banks owned the majority the banks realized they were losing money by selling the houses for less than their mortgage price since house prices were dramatically down, they then foreclosed. What followed was an escalating foreclosure rate panic and many banks and hedge funds, who had bought mortgage-backed securities on the secondary market (which is allowing banks to sell mortgages”, giving them new funds to offer more mortgages to new borrowers) realized they were facing huge losses. The only way out was for massive policy responses and this is what will be dealt with in this essay, what these policies were and how they responded. Questions