Systemic Risk and the 2008–2009 U.S. Financial Crisis: Causes, Course and Consequences

This chapter examines the origins, development and consequences of the 2008–2009 financial crisis in the United States from the perspective of systemic risk. It distinguishes between underlying vulnerabilities, such as financial deregulation, excessive leverage, maturity mismatches and misguided affordable housing policies and proximate triggers, notably the collapse of the subprime mortgage market. The chapter analyses the risk transfer mechanisms within the shadow banking system and securitisation chains that amplified the endogenous fragilities. It further explores the phases of crisis management, policy interventions and post-crisis reforms including the Dodd–Frank Act. Finally, it evaluates financial, macroeconomic and distributional consequences, thus highlighting the feedback loops and contagion dynamics that intensified systemic instability.