The document summarizes the causes and transmission of the global financial crisis. It discusses the pre-crisis situation of debt-driven growth, global imbalances, and weak financial regulation. The immediate trigger was the bursting of the US housing bubble in 2006. This led to a collapse in mortgage-backed securities and stock markets. The crisis then spread through remittances, capital flows, and trade to developing countries. Vulnerability to external shocks determined the degree of impact on different countries.

1. Module 2 The causes and the transmission mechanisms of the crisis

18. Vulnerability analysis