What is a financial tsunami?

Financial tsunami is just a description of the economic crisis, which was caused by the subprime mortgage crisis in the United States. Subprime loans refer to loans made to borrowers with poor credit quality and low income. Due to bad or insufficient credit, these individuals often do not qualify for favorable loans that require borrowers to have an excellent credit history. The reason why lending institutions are willing to grant loans to these people is that subprime mortgage interest rates are usually much higher than prime lending rates and the returns are higher. This kind of loan usually requires no down payment, but the interest will continue to increase. The subprime mortgage crisis has affected many industries such as real estate, finance, and energy in the United States, affecting bank lending, currency circulation, capital tightening, lending credit, and many other issues. However, the impact on some real economies has been relatively limited.