Financial Crisis and Lehman Brother Collapse Essay - 1

Financial Crisis and Lehman Brother Collapse - Essay Example To this end, the paper will critically evaluate all the factors responsible for the global financial crisis and identify whether there were factors that were only related to the financial sector or not. The paper will therefore conclude on whether the financial sector was solely responsible or not Financial Retail Products and the Profit Motive Prior to the financial crisis of 2007, it was believed that mass marketing of retail financial products in high income countries after the early 1980s was safe (Froud, Johal, Montgomerie, & Williams, 2010). This was a general belief that this constituted the democratization of finance and ownership in modern Capitalist society. This is because poor people and middle class persons who could not normally afford to own some kinds of properties could acquire properties through the acquisition of various financial products and services. The supporters of this school of thought believed that it was a shared framework that enabled all people in the society to own what they wanted to own. â€Å"Mainstream finance represented financial innovation in circular and technological terms as that which perfected the market.† (Engelen, Erturk, Froud, Leaver, & Williams, 2008, p. 4). This means that the growth of technology and the enhancement of the financial sector led to the growth and expansion of the debt systems and debt structures (Froud J. , Johal, Montgomerie, & Williams, 2009). This grew the trend of financial intermediation and created more financial retail products. However, this process gave way for the evils of exploitation by numerous financial intermediaries (Froud, Johal, Montgomerie, & Williams, 2010). This created a major problem that fed into the system of the credit crunch. â€Å"Empirical evidence of the United States shows that extension of credit and asset ownership in an unequal society is self defeating because it does not abolish the tyranny of