The 2008 financial crisis, which led to the banking crisis and nearly led to the complete collapse of the global economy, was not caused only by changes in regulatory, regulatory and legislative control, but also fiscal and monetary policies. Many believe that the expansion of monetary excesses and the irresponsibility of some government agencies led to the crisis. According to Taylor (2009) reports, monetary policy excesses were the main cause of the 2008 financial crisis. He reports that, in 2003-2005, federal reserves kept their interest rate target below well known monetary rules that state that historical experiences should be the basis of good policy. He says the Federal Reserve monitored its rates based on what worked best in previous decades, rather than lowering rates to prevent the crisis. Taylor supports his claims with evidence provided by researchers from the Organization for Economic Co-operation, corrected by other countries, showing that the greater the monetary excess, the greater the real estate boom. The crisis was exacerbated by other factors that included variable-rate mortgages and the use of subprime; this has led to excessive risk taking. Evidence shows that excessively low rates have led to excessive risk-taking. Housing inflation was inversely related to both foreclosure and crime rates. Rates have dropped dramatically over the years, which has led to rising home prices that have nearly collapsed mortgage programs. Following the subprime mortgage crisis, the US government introduced the Troubled Asset Relief Program (TARP) in early October 2008 which allowed the purchase of stocks and… paper halves. ...who had surpluses in the country. Works Cited Kaminsky, G., & Reinhart, C. (1999). The twin crises: The causes of banking and balance of payments problems, American Economic Review, 89, (3), 473–500. Killoren, G. D. (2009). How government economic policies caused the 2008 financial crisis. Retrieved from http://rawfinanceblog.com/2009/07/23/how-lax-us-monetary-policy-contributed-to-the-financial-crisisLothian, JR (2009 ). American monetary policy and the financial crisis. Journal of Economic Asymmetries,6 (2), 25-40.Mankiw, N. G. (2010). Fiscal policy questions: Implications of the 2008-2009 financial crisis. Review of the Federal Reserve Bank of St. Louis, 92, (3), 177-184. Taylor, J. B. (2009). How the government created the financial crisis. Wall Street Journal. Retrieved from http://online.wsj.com/article/SB123414310280561945.html