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07 September 2009 

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Financial Crisis Nears One-Year Anniversary

07 September 2009

The venerable Wall Street firm Lehman Brothers collapsed into bankruptcy nearly one year ago, sparking the worst financial crisis since the Great Depression.

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The court action on September 15, 2008 shook bankers, officials and investors, and caused one of the worst stock market declines in history.

The global crisis in confidence meant banks were reluctant to make loans, investors pulled money out of markets, and economic activity slowed.

Over the following weeks and months, economic officials tried to restore lending by slashing interest rates, making emergency loans to banks and using other means to prop up other faltering banks, money-market funds and other institutions.  

After one year, many economies appear to be returning to growth, though unemployment is high in many nations and is likely to continue rising in the United States.

The crisis prompted calls for more effective regulation of financial markets, and demands that banks hold larger reserves to cover possible loan defaults. There also is debate over changing the huge bonuses paid to bank executives so top bankers are rewarded for the long-term growth of the company -- not just short-term profits at high risk.

Some information for this report was provided by AFP and Reuters.

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