The finger of blame points widely, encompassing greedy bankers, the Iraq war and even Margaret Thatcher. By Sean Farrell and Sean O'Grady

China

The source of the greatest of the "global imbalances" still troubling the world economy. The Chinese government has kept the exchange rate of the yuan low to stimulate exports and build up foreign currency reserves - principally in dollars. These were then lent back to the West, driving down interest rates and fuelling a real estate bubble.

The liquidity bubble

The unprecedented flow of cheap money looking for a home flooded the West's economies. Trade surpluses were recycled in the early part of the decade. This stimulated the "search for yield" and, in turn, the mispricing of risk as investor s imagined the high returns they were offered were safer than they proved.

Search for yield

With interest rates low and money sloshing around the system, investors sought out increasingly risky assets for a higher return. Demand squeezed prices so little premium was paid for extra risk. When sub-prime mortgage borrowers started defaulting, the market rediscovered risk with devastating consequences.

Sub-prime lending

With interest rates low and liquidity in plentiful supply, lenders threw caution to the wind, lending billions for high margins to people who found they could not afford repayments when rates rose. Often seen as the cause of the crisis, but in fact the most visible symptom of a 10-year debt binge.

Leverage

Cheap money caused the world to go on a leverage spree. Individuals borrowed to invest in property or buy goods; investors used cheap debt to invest in higher-yielding assets, or borrowed against existing investments; bank lending outstripped customer deposits and activities were kept off balance sheet. The shortage of credit as the debt is unwound threatens to bring the economy to a halt.

Originate and distribute

The craze for higher yielding investments allowed banks to parcel up loans through mortgage securitisation, packaging of corporate debt and other means for sale to investors. This was meant to disperse risk, but when confidence collapsed banks were left with billions of pounds of loans they had not offloaded. No one knew where the debt was, causing further market seizure.

Alan Greenspan

One of Mr Greenspan's predecessors, William McChesney Martin, said his job was to "to take away the punch bowl just as the party gets going". Alan's legacy was less happy; the Greenspan put, the idea that whenever the markets took a tumble the Fed would be along with an interest rate cut to get the party going again.