The 2008 financial crisis

Losses on American subprime mortgages, distributed worldwide through securitisation and amplified by leverage and credit default swaps, cause Lehman Brothers to fail in September 2008 and freeze interbank lending. Governments recapitalise banks at enormous public cost; the recession that follows is the deepest since the 1930s. The political consequences — austerity, distrust of institutions, and the populist turn of the 2010s — outlast the economic ones.