大衰退的主要原因包括廉价资金、过度支出和负储蓄。经济衰退给金融业带来了不确定性，主要的抵押贷款提供者破产，最大的金融机构宣布破产等。美国国际集团(AIG)、雷曼兄弟(Lehman Brothers)和Bar Stems的漏洞崩溃，对美国人的投资构成了威胁。甚至消费银行也被迫将自己的银行出售给更大的银行。
At the end of 2007, the Great Recession started and continued till June 2009. It is a longest recession that was ever noticed since World War II. The Great recession noticed peak of March, 2009 and every branch of economy felt with pain. Stock market lost 50% of its worth. When the borrowing of money is easier as the interest rates are low, naturally there will be increase of demand in the money flow. Cheap money causes more production, more jobs as well as more credit-worthy which results healthy economy. By the year of 2007, all types of entities including banks, companies, and homebuilders noticed record of profits. The banks unwilling to take risk as the homeowners created a demand over the inflated asset prices. Consequently individuals and companies rejected lending. The lending rejections badly affected on various issues which results no buying, no production, no jobs and subsequently default on loans.
The main causes for the Great Recession include cheap money, excessive spending and negative savings. The recession resulted uncertainty on the financial industry, bankruptcy of major mortgage providers, and declaration of bankruptcy by largest financial institutions etc. A bug collapse by AIG, Lehman Brothers and Bar Stems threatened the Americans about their investment. Even consumer banks forced to sell their banks to larger banks.
As a remedial measure, the government increased the deposit insurance up to $250,000 which is under the coverage of Federal Deposit Insurance Corporation. The Federal Reserve can use the open market in order to increase the money supply. The interest rate will be lower, when the Federal Reserve (FED) buys bonds. The FED used the interest rate as a tool in the monitory policy so that banks access the capital from the FED. Current monitory polices are ineffective and it is a big fail of FED (Taylor).