Introduction In 2008, the world experienced a tremendous financial crisis that had its roots in the US real estate market. Furthermore, it is considered by many economists to be one of the worst recessions since the Great Depression of the 1930s. After having a huge effect on the US economy, the financial crisis spread to Europe and the rest of the world. It has ruined economies, collapsed financial firms and impoverished individual lives. For example, the financial crisis resulted in the collapse of large financial institutions such as Fannie Mae, Freddie Mac, Lehman Brothers, and AIG. These collapses have not only affected their own countries but also on the international scale. Therefore, government intervention by modifying and expanding monetary and fiscal policy or granting bailout plans is necessary to eliminate and control the enormous effects of the financial crisis. The overwhelming spread of the global crisis poses great challenges to the Asia and Pacific regions. as well as Vietnam. Vietnam is known as one of the most open economies in the world and relies heavily on external capital sources (e.g. FDI or ODA) to support its development demands. Therefore, Vietnam is highly vulnerable to the broad effects of the financial crisis on global trade and financial flows. First, this essay attempts to analyze the causes of the financial crisis that originated in the United States. Second, the impacts of the financial crisis on the Vietnamese economy. In particular, the general prospects of the economy and the labor market will be examined. Finally, this essay will present the Vietnamese government's responses to reduce the effects of the recession.II. The global financial crisis and Vietnam A. Main causes of the global financial crisis T...... middle of paper .......html (Accessed: 20 August 2010). Pham, QN (2009) Impact of the global financial crisis and Vietnam economic crisis, a rapid assessment. Available at: http://www.ilo.org/asia/whatwedo/events/lang--en/docName--WCMS_103550/index.htm (accessed: 3 August 2010). Krugman, P. (2009) ' Revenge of the Glut', The New York Times, March [Online]. Available at: http://www.nytimes.com/2009/03/02/opinion/02krugman.html (accessed August 3, 2010).Steverman,B. and Bogoslaw, D. (2008) 'The financial crisis blame game', Business week, October [Online]. Available at: http://www.businessweek.com/investor/content/oct2008/pi20081017_950382.htm?chan=top+news_top+news+index+-+temp_top+story (accessed August 1, 2010).Velde, DK (2008 ). The global financial crisis and developing countries. Available at: http://www.odi.org.uk/resources/download/2462.pdf (Accessed: 5 August 2010).