Wall Street is in a decline because of the U.S. financial crisis. Lehman Brothers Holdings, one of the largest investment banks in America, failed. Merrill Lynch, Morgan Stanley, and more investment banks are also faced with bankruptcy. The U.S. is the greatest economic power in the world. However, why did they face this crisis, and what will be the influence on other countries? The main reason that the U.S. experienced the financial crisis is sub-prime mortgages.

In the U.S., when people purchase houses, they pay some of the money and borrow the rest of the money from a bank as a long-term loan. Around 2000, however, in order to stimulate the economy, the U.S. made a sub-prime mortgage rate. The sub-prime mortgage rate is a credit rating which allows people who could never have borrowed because of their bad credit rating to borrow money. Through the system, people who had low credit ratings could purchase their own houses by borrowing the money from banks. However, there were enormous and serious risks. Many people were unable to repay their loans. Therefore, the banks had to raise interest rates to maintain themselves, and this made more people who didn't have the ability to pay back the money give up paying off the money. As this vicious circle continued, houses were seized, and the housing market collapsed. Now, there are too many houses, including new and old homes, so houses do not sell well.

Most of all, as the condition of the housing market gets worse, it affects the financial sector. Financial companies are firing staff to maintain their firms. For example, in 2007, Citibank laid off 15, 000 workers. The problems of the U.S. financial crisis can seriously affect other countries, too. For example, Lehman Brothers Holdings was one of the leading investment banks in the world, so many investment banks invested in Lehman Brothers Holdings. However, Lehman Brothers Holdings failed, and its bankruptcy had an influence on these banks. The investors suffered a loss, and the stock market also became insecure.

To restore the failed companies, the U.S. government released money onto the market. However, this made the financial crisis more serious. The U.S. dollar has been unstable. The U.S.'s ailing economic condition reduced consumer confidence, and companies which export to or import from the U.S. have been influenced. In the international market, commodities such as grain and petroleum are traded in dollars. However, if the value of the dollar falls, the value of other countries' money is forced up, so commodities' costs rise to keep their value.

In the case of Korea, the government also can't help but worry about the influence of the U.S. financial crisis. The won has been falling steadily, and Korea, which already experienced economic trouble in 1997, fears its possible effects. Rising oil and raw material prices are having a direct effect. As food, clothing, and other necessities become more expensive, the economic situation of many consumers is also worsening.

There are many contrary opinions among economists. Some say that this crisis will be overcome and the economy will return to its original position, but others say the crisis will get much bigger and more serious. The most important thing is that we need to find a way not to get in such a financial crisis once again. It may not be simple, but we need to try our best to escape a possible second economic crisis and revive our economy with a concerted effort.