The global crisis is a complex set of interrelated events and processes. These events and processes may vary in severity across countries and regions. International crisis-regulating institutions need to be aware of these differences in crisis impact to avoid causing harm and maintain their public legitimacy (Findlay 2013).
The global financial crisis exploded in September 2008 following the failure of Lehman Brothers and the near-failure of several other major financial firms. This sparked a panic in financial markets worldwide as investors pulled their money out of the markets and worried about how vulnerable the remaining financial institutions were to bankruptcy. As a result, global economic activity slowed sharply and millions of people lost their jobs, homes, or large amounts of wealth.
Governments responded by increasing spending to stimulate demand and support employment; guaranteeing deposits and bank bonds; reducing or purchasing ownership stakes in financial firms; and lowering policy interest rates to near zero, a practice known as quantitative easing. These interventions prevented a global depression but left many economies with depressed growth and slow recovery.
Consumer reactions to global crises depend on how they view the desirability of globalization. Those with conservative views toward globalization view national and international institutions as competing trust referents, transfer blame for crisis grievances to national institutions, and distrust international institutions. Conversely, those with progressive views towards globalization view national and international institutions as collaborative trust referents, do not blame international institutions for a crisis, retain institutional trust in both national and international institutions, and follow the guidance of local and international institutions during a crisis.