What caused the Global Financial Crises?

Context: The preconditioning for the financial crisis were complex and multi-causal. Almost two decades prior, the U.S. Congress had passed legislation encouraging financing for affordable housing. However, in 1999, parts of the Glass-Steagall legislation, which had been adopted in 1933, were repealed, permitting financial institutions to commingle their commercial and proprietary trading operations. Arguably the largest contributor to the conditions necessary for financial collapse was the rapid development in predatory financial products which targeted low-income, low-information homebuyers who largely belonged to racial minorities. This market development went unattended by regulators and thus caught the U.S. government by surprise.

Answer: There were multiple factors that caused the financial crises. Two key factors are following:

- Two decades before the crisis, the U.S Government implemented multiple new laws to help encourage financing for affordable housing.  However, in 1999, portions of the Glass-Steagall Act were repealed creating more overall risk as it allowed institutions to commingle low-risk real estate investments with riskier investment operations.  

- A large increase in predatory home loan lending practices targeted low-income, low-credit, uninformed homebuyers (mostly racial minorities).