ABSTRACT
This chapter deals with the financial crisis starting in 2007 and the Great Recession of 2008-2009. In the euro area, the consequences of the global financial and economic crisis of 2008-2009 became just the prelude for the euro crisis that followed shortly afterward and that cast the region into a second recession, lasting from the end of 2011 to early 2013. The financial sector will continue to be the focus of intense debate about regulation, transparency, and the political power of large financial institutions. The financial crisis clearly demonstrated the importance of this relationship. The disappearance of immense financial wealth in the immediate aftermath of the crisis spilled over into the real economy. As people had less wealth, they were apt to spend less. Calling the period after the financial crisis the Great Recession invites comparison with the other "great" economic downturn of the past century, the Great Depression.
