The main reason for the 2008 financial crisis in Russia was a sharp drop in global oil prices, which occurred as a result the global economic crisis that began in the United States.
The economic crisis that began in the United States in 2007-2008 arose due to the massive issuance of mortgage loans, including high-risk (subprime) loans to borrowers with a bad credit history. When housing prices began to fall, many borrowers were unable to repay their loans, which led to mass evictions and a glut of housing on the market. The bankruptcies of large financial institutions trading complex derivatives related to these mortgages caused a crisis of confidence in the financial system, which in turn led to a global recession, high unemployment and serious economic consequences.
Here are additional key aspects related to the cause of the 2008 crisis:
- Oil price drop: In early 2008, the price of oil reached record levels, but by the end of the year it had fallen from over $140 per barrel to $40. This sharp change in oil prices has had a negative impact on the Russian economy, as the country's economy is heavily dependent on export revenues from the sale of oil and gas.
- The impact of the global crisis: The drop in oil prices was part of the broader global financial crisis, which was triggered by problems in the mortgage lending market in the United States. This led to the collapse of major financial institutions, a drop in confidence in financial markets and a significant increase in volatility.
- Investments and investments: Due to the fall in oil prices, as well as in conditions of global instability, foreign investments began to be withdrawn from Russia, which aggravated the economic situation and led to a lack of liquidity in the banking system.
- Expectations and panic in the markets: Amid falling commodity prices and falling stock markets, panic began among investors, which led to a sharp withdrawal of capital and further exacerbation of the crisis.
Thus, the fall in world oil prices was the main trigger that triggered a chain reaction of problems in the Russian economy and led to a deep financial crisis.