Financial Crisis Timeline
From my book Finance and Financial Markets here is a copy of the timeline of event during the period 2007-2009
(copyright) Keith Pilbeam 2010
A time-line of major events during the Financial Crisis 2007-2009
► 27 February 2007 HSBC sacks two of its top chiefs due to large losses on subprime lending.
► 2 April 2007 New Century Financial, which specialized in subprime mortgages, files for Chapter 11 Bankruptcy and cuts half its workforce.
► 3 May 2007 UBS announce the closure of its Dillon Reed hedge fund following $125 million of subprime losses.
► 22 June Bear Stearns announces a $3.2 billion bailout of two of its hedge funds.
► June/July 2007 Rating agencies announce significant downgrades on some subprime mortgage backed securities previously rated AAA to A+.
► July 2007 Investment Bank Bear Stearns warns that two of its hedge funds are in major financial difficulties and that investors in the funds have lost most of their investment.
► 19 July 2007 Federal Reserve Chairman Ben Bernanke warns that losses in the subprime market could total $100 billion.
► 31 July 2007 Credit market turmoil – shares in American Home Mortgage Investment plummet 90 per cent after the US lender said it could no longer fund home loans. Australian Macquarie Bank announces that two of its fortress funds, which invest in securitized loans, could lose up to a quarter of their value, or more than A$300 million. MSCI Asia index excluding Japan falls 4%.
► 2 August 2007 German Bank IKB announces $12 billion in subprime exposure.
► 6 August 2007 American Home Mortgages, the 10th largest home lender in the US which specializes in prime or near prime mortgages, files for Chapter 11 bankruptcy.
► 9 August 2007 BNP Paribas warns investors that they will not be able to withdraw money from two of its funds due to a ‘complete evaporation of liquidity’ from the market. The ECB pumps €95 billion of liquidity into the markets, followed a few days later by a further €108.7 billion.
► 13 August 2007 Goldman Sachs injects $3 billion into one of its hedge funds which has been hit by falls in global equity markets.
► 16 August 2007 Countrywide Financial, America’s largest mortgage provider, calls on $11.5 billion lifeline from 40 of the world’s largest banks.
► 17 August 2007 The Federal Reserve cuts its Federal Funds rate from 6.25% to 5.75%, its first rate cut in 4 years
► 22 August 2007 Bank of America injects $2 billion of capital to rescue Countrywide Financial.
► 4 September 2007 (3-month) £LIBOR rises to 6.80% above the Bank of England’s base rate of 5.75% as banks show increased reluctance to lend to each other on the interbank markets.
► 6 September 2007 The Federal Reserve provides $31.25 billion of loans to its banks and the ECB follows with €42 billion of liquidity for banks in the Eurozone area.
► 13 September 2007 It is revealed that the British bank Northern Rock has funding problems and is to be granted emergency support from the Bank of England.
► 14–16 September 2007 Worried depositors in Northern Rock cause the first run on a British bank since 1866 as they queue to withdraw their funds.
► 17 September 2007 The UK government guarantees all deposits in Northern Rock to end the bank run.
► 18 September 2007 The Federal Reserve cuts its Federal Funds rate from 5.25% to 4.75%. The Dow Jones index rises 2.51% on the news to 13,759.
► 19 September 2007 The Bank of England announces it will inject £10 billion into the money markets to try and reduce the £LIBOR 3-month rate.
► 1 October 2007 UBS announces $3.4 billion of losses from its subprime exposure. Citigroup announces losses of $3.1 billion.
► 5 October 2007 Merrill Lynch announces $5.6 billion of subprime losses.
► 15 October 2007 Citigroup announces a further $5.9 billion of losses from subprime and other exposures.
► 30 October 2007 Merrill Lynch announces $7.9 billion of losses and its Chief Executive Officer resigns.
► 1 November 2007 Credit Suisse announces a £1 billion write down on structured finance, mortgages and leveraged loan-related losses.
► 2 November 2007 Citigroup announces further losses of $8 to $11 billion and its Chairman/CEO Chuck Prince resigns.
► 7 November 2007 Morgan Stanley announces a $3.7 billion subprime-related write down.
► 13 November 2007 Bank of America announces a $3 billion write down.
► 15 November 2007 Barclays Bank announces a £1.3 billion write down.
► 20 November 2007 Freddie Mac announces a $2.2 billion quarterly loss after a $4.8 billion charge due to bad debts and write downs.
► 6 December 2007 President George W. Bush announces a plan to help more than 1 million homeowners facing foreclosure and the Bank of England cuts its base rate by 0.5%.
► 10 December 2007 UBS announces a $10 billion write down while Société Générale launches a $4.3 billion bailout of one of its SIVs.
► 12 December 2007 The Federal Reserve cuts the interest rate from 4.50% to 4.25%.
► 13 December 2007 The Federal Reserve, the European Central Bank, Bank of England, Swiss and Canadian central banks coordinate to offer a combined $110 billion of loans to troubled banks.
► 17 December 2007 A $20 billion injection is announced by the Federal Reserve
► 18 December 2007 The European Central Bank announces a $500 billion injection to see banks through the Christmas/New Year period.
► 19 December 2007 Standard & Poor’s downgrades the credit rating of some monoline insurers which repay the bond holder if a bond issuer defaults. This increases concerns about future bank losses and the health of the financial system.
► 8 January 2008 Bear Stearns’ Chief resigns.
► 11 January 2008 Bank of America buys Countrywide Financial for $4 billion.
► 14 January 2008 Citigroup announces $9.8 billion loss following $18.1 billion of write downs due to subprime exposure.
► 17 January 2008 Merrill Lynch announces a further write down of $14.1 billion of subprime losses.
► 21 January 2008 Global stockmarkets suffer their biggest fall since the 11 September 2001 terrorist attacks.
► 22 January 2008 The Federal Reserve cuts the Federal Fund rate by 0.75% to 3.5%, its biggest cut in 25 years.
► 30 January 2008 The Federal Reserve announces a 0.5% cut on Federal Funds rate from 3.5% to 3%.
► 31 January 2008 MBIA, a bond insurer, announces a quarterly loss of $2.3 billion due to subprime exposure.
► 7 February 2008 The Federal Reserve Chairman Ben
Bernanke expresses concern over monoline insurers. The Bank of England cuts it interest rate by 0.5% to 5.25%.
► 10 February 2008 Leaders from the G7 economies estimate losses from subprime mortgages at $400 billion.
► 17 February 2008 Bear Stearns, the fifth largest investment bank in the USA, is rescued through an acquisition by JP Morgan for a mere $240 million (one year earlier its market capitalization had been $18 billion) and the deal is backed by $30 billion of central bank loans. Northern Rock is nationalized by the UK government.
► 6 March 2008 Carlyle Group, a private equity firm, announces a $22 billion write down in its bond fund, Carlyle Capital Corporation.
► 16 March 2008 Bear Stearns is sold to JP Morgan for $240 million (less than 1% of its market valuation a month earlier) in an emergency takeover. As part of the deal the Federal Reserve agrees to underwrite $30 billion of Bear Stearn toxic subprime exposure.
► 1 April 2008 UBS Chief Marcel Ospel resigns following a £10 billion write off.
► 8 April 2008 IMF estimates that potential losses from the credit crunch could exceed $1 trillion.
► 14 April 2008 Wachovia announces $4.4 billion of write downs.
► 18 April 2008 Citigroup announces a further $15.2 billion write down and 9,000 job losses.
► 21 April 2008 Bank of England announces a new Special Liquidity System £50 billion swap facility scheme to aid banks.
► 22 April 2008 The Royal Bank of Scotland announces the biggest-ever rights issue in UK corporate history of £12 billion. It also announces £5.9 billion of write downs.
► 25 April 2008 UK housebuilder Persimmon announces major cutbacks.
► 29 April 2008 HBOS announces a £4 billion rights issue.
► 30 April 2008 The first fall in UK house prices year on year is announced by Nationwide and followed later in the week by Halifax’s announcement of a 0.9% annual fall.
► 2 May 2008 The Federal Reserve and European Central Bank inject $82 billion into the money markets.
► 14 May 2008 Bradford & Bingley announces an emergency £300 million rights issue.
► 22 May 2008 UBS announces a $15.5 billion rights issue with its subprime losses having increased to $37 billion.
► 19 June 2008 Research shows that 190 hedge funds have been wound up in the previous 3 months.
► 25 June 2008 Barclays announces a £4.5 billion rights issue and sells a £1.7 billion stake in itself to the Qatar Investment Authority.
► 10 July 2008 Fannie Mae and Freddie Mac shares fall in value by 50% during the trading day.
► 11 July 2008 Indymac Bank is seized by the Federal Deposit Insurance Corporation following a run on the bank.
► 14 July 2008 The US authorities announce that they are stepping in to support Fannie Mae and Freddie Mac which have a combined $5.5 trillion of mortgage-related assets.
► 23 July 2008 President George W. Bush backs a plan to save Fannie Mae and Freddie Mac.
► 30 July 2008 Lloyds Bank announces £1.09 billion write down on structured finance holding and investments.
► 8 August 2008 Royal Bank of Scotland announcees a write off of £5.9 billion on assets affected by the credit crunch.
► 1–6 September 2008 Stockmarkets around the world have one of their worst weeks.
► 7 September 2008 The US government announces the biggest rescue in US corporate history as Fannie Mae and Freddie Mac are placed into ‘conservatorship’ (nationalization by any other name).
► 10 September 2008 Lehman Brothers announces a $3.9 billion loss for the quarter.
► 15 September 2008 Lehman Brothers files for Chapter 11 bankruptcy and Merrill Lynch agrees to be taken over by Bank of America for $50 billion.
► 16 September 2008 The US government announces an $85 billion rescue of the world’s biggest insurer American International Group which had heavy losses in credit default swaps in return for an 80% stake in the company.
► 17 September 2008 Lloyds TSB announce a £12 billion takeover of Halifax Bank of Scotland (HBOS), the UK’s largest mortgage provider. The regulatory authorities allow the takeover which would normally have been referred due to the combined group having close to a 1/3 share of the UK savings and loan market.
► 18 September 2008 The Federal Reserve announces a $180 billion increase in swap facilities with the European Central Bank, Swiss National Bank, Bank of England, Bank of Canada and Bank of Japan.
► 25 September 2008 Washington Mutual with assets of $307 billion is closed down by regulators (Office of Thrift Supervision) and sold off for $1.9 billion to JP Morgan following a run on its deposits, with $16.9 billion being withdrawn in the preceding 10 days.
► 28 September 2008 Fortis, a European Banking and Insurance group, is rescued through part-nationalization (49% stake) in return for a capital injection of €11.2 billion from the central banks of Belgium (€4.7 billion), Netherlands (€4 billion) and Luxembourg (€2.5 billion). The Bank had made major losses after taking a €24 billion stake in the Dutch bank ABN Amro, which had huge losses on its books from its subprime exposures. US law makers announce that they have agreed on a $700 billion bailout fund designed to purchase distressed assets from US banks.
► 29 September 2008 The Dow Jones index falls 770 points (its biggest ever points fall) or 7.7% following rejection of the proposed $700 billion bailout plan by Congress. Bradford & Bingley, a British mortgage provider, is nationalized. Its £50 billion of mortgage-loan book is taken over by the British government and its savings business sold to the Spanish bank Santander. Iceland’s government takes a 75% controlling interest of its third largest bank, Glitner, with a €600 million capital injection.
► 30 September 2008 Dexia Bank is rescued by the Belgian, Dutch and French governments with a €6.4 billion package. The Irish government announces a decision to protect all Irish bank deposits for the next two years.
► 3 October 2008 The $700 billion bailout package is passed by the House of Representatives. The Financial Services Authority raises the limit on insured deposits from £35,000 to £50,000, which protects 98% of retail deposits.
► 6 October 2008 Germany announces a €50 billion rescue package of Hypo Real Estate, one of its biggest banks, and gives an unlimited guarantee on German bank deposits. A similar bank deposit guarantee is announced by the Danish government. Iceland announces a package to rescue its banking system.
► 7 October 2008 The Icelandic government takes control of its second largest bank, Landsbanki, which owns Icesave bank in the UK, causing concerns for UK depositors who have their accounts frozen.
► 8 October 2008 The UK government announces a £50 billion rescue of its banking system in return for preferred shares, along with £100 billion of lending support from the Bank of England and £250 billion of loan guarantees on interbank lending. The Federal Reserve, European Central Bank (ECB), Bank of England, and the central banks of Canada, Sweden and Switzerland make a coordinated 0.5% interest rate cut, making the Federal Funds rate 1.5%, the ECB rate 3.75%, and the UK base rate 4.5%.
► 10 October 2008 Large falls in stockmarkets in the UK, Germany and France of 7% to 9%, with Wall Street having fallen 20% in the preceding 10 days.
► 11 October 2008 Finance ministers from the G7 industrialized nations announce a five-point plan to unfreeze the credit markets, protect savers, provide liquidity, strengthen financial institutions and restore confidence by taking an appropriate regulatory response.
► 13 October 2008 The UK government announces a £37 billion package to inject capital into three of its biggest banks: Lloyds TSB, HBOS and the Royal Bank of Scotland.
► 14 October 2008 The US government announces a $250 billion programme to buy stakes in the form of preference shares in US banks and to insure newly issued debt by the banks on a temporary basis.
► 15 October 2008 The Dow Jones falls 733 points or 7.87%, its biggest one-day percentage fall since the stockmarket collapse of 26 October 1987.
► 30 October 2008 The Federal Reserve cuts the Federal Funds rate from 1.5% to 1%. European governments agree a €1 trillion facility to guarantee interbank lending in the Euro area.
► 6 November 2008 The International Monetary Fund (IMF) announces a $16.4 billion loan rescue package for Ukraine. The Bank of England cuts its base rate from 4.5% to 3%, the lowest level since 1955. The ECB also cuts its rate from 3.75% to 3.25%.
► 9 November 2008 China announces a $568 billion stimulus package for its economy.
► 12 November 2008 The USA abandons its plan to use the $700 billion to buy distressed assets from the banks and instead decides to concentrate the funds on improving the flow of consumer credit.
► 14 November 2008 G20 meeting of developed and developing nations discusses the financial crisis and longer-term reform issues.
► 20 November 2008 The IMF extends a $2.1 billion loan to Iceland following the collapse of its banking system
► 23 November 2008 The US government announces a $20 billion rescue package for Citigroup following a 60% collapse in its share price in the preceding week.
► 24 November 2008 The UK government announces a one-year cut in value added tax from 17.5% to 15% to stimulate consumer demand, as part of a £25.6 billion stimulus package equivalent to 1.1% of UK GDP.
► 25 November 2008 The US Federal Reserve announces it will inject a further $800 billion of support to the financial system: $600 billion to purchase mortgage backed securities (including $100 billion from Fannie Mae and Freddie Mac) and $200 billion to encourage consumer lending (by buying up securitized debt in credit cards, auto loans and credit card debt).
► 26 November 2008 The European Commission announces a coordinated €200 billion economic recovery plan financed by the member states and designed to stimulate the European economy with a targeted 1.2% fiscal stimulus.
► 4 December 2008 President Sarkozy announces a €25 billion package to stimulate public sector investment and loans to the French car industry.
► 11 December 2008 Bank of America announces 35,000 job losses. The Bank of England cuts its base rate from 3% to 2%, its lowest for 57 years. The ECB cuts it policy rate from 3.25% to 2.5%. Sweden cuts its policy rate from 3.75% to 2%.
► 16 December 2008 The Federal Reserve cuts its Federal Fund rate from 1% to a 0–0.25% target range, the lowest in its history.
► 19 December 2008 George W. Bush announces that $17.4 billion of the $700 billion TARP fund will be used to bail out the big three auto companies: Chrysler, General Motors and Ford.
► 29 December 2008 The US Treasury announces a $6 billion rescue package for General Motors Acceptance Corporation, the financing arm of General Motors.
► 8 January 2009 The Bank of England cuts its base rate to 1.5%, the lowest in its 315-year history.
► 9 January 2009 US jobless rate rises to 7.2%, its highest in 16 years.
► 12 January 2009 Angela Merkel announces a €50 billion stimulus package for the German economy including investment in railways, roads and schools, tax cuts and tax relief. China announces the largest drop in exports for a decade.
► 14 January 2009 The UK government announces £14 billion in loans to small and medium-sized businesses.
► 15 January 2009 The ECB cuts its key interest rate to 2%. The Irish government nationalizes Anglo Irish Bank.
► 16 January 2009 The US government lends $20 billion to Bank of America following losses from its takeover of Merrill Lynch.
► 19th January 2009 The UK government announces a further bailout of the UK banking system, with £50 billion being set aside for lending to large corporations and an Asset Protection Scheme to insure around £600 billion of toxic bank assets.
► 24 January 2009 President Obama announces an economic recovery package including expenditure on electricity power lines.
► 28 January 2009 The International Labour Office forecasts 51 million job losses worldwide as a result of the credit crunch.
► 2 February 2009 France announces a €33.1 billion economic stimulus package.
► 5 February 2009 The Bank of England cuts its base rate from 1.5% to 1%.
► 10 February 2009 US Treasury Secretary Tim Geithner announces that stress tests will be conducted on 19 of the largest US banks with assets over $100 billion each.
► 13 February 2009 Germany passes its €50 billion stimulus package.
► 17 February 2009 President Obama signs a $787 billion economic stimulus programme aimed at saving/creating 3.5 million jobs, calling it ‘the most sweeping recovery package in our history’.
► 26 February 2009 The Royal Bank of Scotland announces its participation in the Asset Protection Scheme by insuring some £325 billion of its assets against future losses in return for a £6.5 billion premium to the government.
► 2 March 2009 AIG announces a $61.7 billion loss for the third quarter of 2008, the largest in US corporate history.
► 5 March 2009 The Bank of England reduces its base rate from 1% to 0.5% and announces a £75 billion policy of quantitative easing.
► 14 March 2009 The G20 meeting in London pledges a sustained effort to pull the global economy out of recession.
► 18 March 2009 The Federal Reserve announces it will buy approximately $1.2 trillion of debt in a bid to boost lending and economic recovery: $300 billion in Treasury purchases, $750 billion in mortgage backed securities and $100 billion in debt issue by Fannie Mae and Freddie Mac.
► 27 March 2009 Lloyds HBOS announces its participation in the Asset Protection Scheme by insuring some £260 billion of its assets against future losses in return for a £25.6 billion premium to the government.
► 2 April 2009 Meeting of the G20 in London pledges measures totalling $1.1 trillion to stave off recession in the global economy.
► 5 April 2009 Japan announces a $100 billion stimulus package.
► 22 April 2009 The IMF predicts financial losses from the credit crunch could total £4 trillion with $2.7 trillion of losses for banks and $1.3 trillion for other financial institutions.
► 7 May 2009 The Federal Reserve announces the results of its stress tests on 19 leading US banks. Ten out of the 19 banks are required to produce plans to raise $74.6 billion in capital by 8 June 2009 and complete the capital raising by November. The capital could be raised by issuance of new equity or asset sales. In the event of failing to raise the capital then the banks would receive funds from the Treasury in return for stakes in the companies.
► 8 May 2009 The ECB announces it is to engage in €60 billion of covered euro-denominated bonds and cuts its benchmark interest rate to 1%. The Bank of England announces a further £50 billion of quantitative easing for the five months from March 2009, bringing its total to £125 billion.
► 1 June 2009 The world’s largest car maker, General Motors, goes into bankruptcy.
► 10 June 2009 Ten of the largest US banks announce they are able to repay the US government $68 billion of TARP money.
► 17 June 2009 The US Treasury announces plans for reform of the banking system, including higher capital requirements for large banks, regulation of securitized assets, consumer mortgage protection, powers to take over failing banks and global regulatory standards.
► 16 July 2009 Ben Bernanke talks about the ‘exit strategy’ of the Federal Reserve following its handling of the credit crunch.
► 6 August 2009 The Bank of England announces an increase in its quantitative easing policy from £125 billion to £175 billion.
► 25 August 2009 President Obama reinstates Ben Bernanke as Chairman of the Federal Reserve.
► 27 August 2009 FDIC announces the number of ‘problem banks’ has increased to 416 institutions with $300 billion of assets.
► 1 November 2009 CIT Group files for Chapter 11 bankruptcy wiping out the $2.8 billion stake taken out by the US government in December 2008.
► 5 November 2009 Fannie Mae reports net loss of $18.9 billion for Q3 2009, a total of $111 billion since Q3 2008.
► 2 December 2009 Bank of America announces it will buy back $45 billion of preferred stock issued to the US government under the TARP
► 14 December 2009 Wells Fargo and Citigroup announce they will buy back a combined $45 billion of preferred stock issued to the US government under the TARP
From my book Finance and Financial Markets here is a copy of the timeline of event during the period 2007-2009
(copyright) Keith Pilbeam 2010
A time-line of major events during the Financial Crisis 2007-2009
► 27 February 2007 HSBC sacks two of its top chiefs due to large losses on subprime lending.
► 2 April 2007 New Century Financial, which specialized in subprime mortgages, files for Chapter 11 Bankruptcy and cuts half its workforce.
► 3 May 2007 UBS announce the closure of its Dillon Reed hedge fund following $125 million of subprime losses.
► 22 June Bear Stearns announces a $3.2 billion bailout of two of its hedge funds.
► June/July 2007 Rating agencies announce significant downgrades on some subprime mortgage backed securities previously rated AAA to A+.
► July 2007 Investment Bank Bear Stearns warns that two of its hedge funds are in major financial difficulties and that investors in the funds have lost most of their investment.
► 19 July 2007 Federal Reserve Chairman Ben Bernanke warns that losses in the subprime market could total $100 billion.
► 31 July 2007 Credit market turmoil – shares in American Home Mortgage Investment plummet 90 per cent after the US lender said it could no longer fund home loans. Australian Macquarie Bank announces that two of its fortress funds, which invest in securitized loans, could lose up to a quarter of their value, or more than A$300 million. MSCI Asia index excluding Japan falls 4%.
► 2 August 2007 German Bank IKB announces $12 billion in subprime exposure.
► 6 August 2007 American Home Mortgages, the 10th largest home lender in the US which specializes in prime or near prime mortgages, files for Chapter 11 bankruptcy.
► 9 August 2007 BNP Paribas warns investors that they will not be able to withdraw money from two of its funds due to a ‘complete evaporation of liquidity’ from the market. The ECB pumps €95 billion of liquidity into the markets, followed a few days later by a further €108.7 billion.
► 13 August 2007 Goldman Sachs injects $3 billion into one of its hedge funds which has been hit by falls in global equity markets.
► 16 August 2007 Countrywide Financial, America’s largest mortgage provider, calls on $11.5 billion lifeline from 40 of the world’s largest banks.
► 17 August 2007 The Federal Reserve cuts its Federal Funds rate from 6.25% to 5.75%, its first rate cut in 4 years
► 22 August 2007 Bank of America injects $2 billion of capital to rescue Countrywide Financial.
► 4 September 2007 (3-month) £LIBOR rises to 6.80% above the Bank of England’s base rate of 5.75% as banks show increased reluctance to lend to each other on the interbank markets.
► 6 September 2007 The Federal Reserve provides $31.25 billion of loans to its banks and the ECB follows with €42 billion of liquidity for banks in the Eurozone area.
► 13 September 2007 It is revealed that the British bank Northern Rock has funding problems and is to be granted emergency support from the Bank of England.
► 14–16 September 2007 Worried depositors in Northern Rock cause the first run on a British bank since 1866 as they queue to withdraw their funds.
► 17 September 2007 The UK government guarantees all deposits in Northern Rock to end the bank run.
► 18 September 2007 The Federal Reserve cuts its Federal Funds rate from 5.25% to 4.75%. The Dow Jones index rises 2.51% on the news to 13,759.
► 19 September 2007 The Bank of England announces it will inject £10 billion into the money markets to try and reduce the £LIBOR 3-month rate.
► 1 October 2007 UBS announces $3.4 billion of losses from its subprime exposure. Citigroup announces losses of $3.1 billion.
► 5 October 2007 Merrill Lynch announces $5.6 billion of subprime losses.
► 15 October 2007 Citigroup announces a further $5.9 billion of losses from subprime and other exposures.
► 30 October 2007 Merrill Lynch announces $7.9 billion of losses and its Chief Executive Officer resigns.
► 1 November 2007 Credit Suisse announces a £1 billion write down on structured finance, mortgages and leveraged loan-related losses.
► 2 November 2007 Citigroup announces further losses of $8 to $11 billion and its Chairman/CEO Chuck Prince resigns.
► 7 November 2007 Morgan Stanley announces a $3.7 billion subprime-related write down.
► 13 November 2007 Bank of America announces a $3 billion write down.
► 15 November 2007 Barclays Bank announces a £1.3 billion write down.
► 20 November 2007 Freddie Mac announces a $2.2 billion quarterly loss after a $4.8 billion charge due to bad debts and write downs.
► 6 December 2007 President George W. Bush announces a plan to help more than 1 million homeowners facing foreclosure and the Bank of England cuts its base rate by 0.5%.
► 10 December 2007 UBS announces a $10 billion write down while Société Générale launches a $4.3 billion bailout of one of its SIVs.
► 12 December 2007 The Federal Reserve cuts the interest rate from 4.50% to 4.25%.
► 13 December 2007 The Federal Reserve, the European Central Bank, Bank of England, Swiss and Canadian central banks coordinate to offer a combined $110 billion of loans to troubled banks.
► 17 December 2007 A $20 billion injection is announced by the Federal Reserve
► 18 December 2007 The European Central Bank announces a $500 billion injection to see banks through the Christmas/New Year period.
► 19 December 2007 Standard & Poor’s downgrades the credit rating of some monoline insurers which repay the bond holder if a bond issuer defaults. This increases concerns about future bank losses and the health of the financial system.
► 8 January 2008 Bear Stearns’ Chief resigns.
► 11 January 2008 Bank of America buys Countrywide Financial for $4 billion.
► 14 January 2008 Citigroup announces $9.8 billion loss following $18.1 billion of write downs due to subprime exposure.
► 17 January 2008 Merrill Lynch announces a further write down of $14.1 billion of subprime losses.
► 21 January 2008 Global stockmarkets suffer their biggest fall since the 11 September 2001 terrorist attacks.
► 22 January 2008 The Federal Reserve cuts the Federal Fund rate by 0.75% to 3.5%, its biggest cut in 25 years.
► 30 January 2008 The Federal Reserve announces a 0.5% cut on Federal Funds rate from 3.5% to 3%.
► 31 January 2008 MBIA, a bond insurer, announces a quarterly loss of $2.3 billion due to subprime exposure.
► 7 February 2008 The Federal Reserve Chairman Ben
Bernanke expresses concern over monoline insurers. The Bank of England cuts it interest rate by 0.5% to 5.25%.
► 10 February 2008 Leaders from the G7 economies estimate losses from subprime mortgages at $400 billion.
► 17 February 2008 Bear Stearns, the fifth largest investment bank in the USA, is rescued through an acquisition by JP Morgan for a mere $240 million (one year earlier its market capitalization had been $18 billion) and the deal is backed by $30 billion of central bank loans. Northern Rock is nationalized by the UK government.
► 6 March 2008 Carlyle Group, a private equity firm, announces a $22 billion write down in its bond fund, Carlyle Capital Corporation.
► 16 March 2008 Bear Stearns is sold to JP Morgan for $240 million (less than 1% of its market valuation a month earlier) in an emergency takeover. As part of the deal the Federal Reserve agrees to underwrite $30 billion of Bear Stearn toxic subprime exposure.
► 1 April 2008 UBS Chief Marcel Ospel resigns following a £10 billion write off.
► 8 April 2008 IMF estimates that potential losses from the credit crunch could exceed $1 trillion.
► 14 April 2008 Wachovia announces $4.4 billion of write downs.
► 18 April 2008 Citigroup announces a further $15.2 billion write down and 9,000 job losses.
► 21 April 2008 Bank of England announces a new Special Liquidity System £50 billion swap facility scheme to aid banks.
► 22 April 2008 The Royal Bank of Scotland announces the biggest-ever rights issue in UK corporate history of £12 billion. It also announces £5.9 billion of write downs.
► 25 April 2008 UK housebuilder Persimmon announces major cutbacks.
► 29 April 2008 HBOS announces a £4 billion rights issue.
► 30 April 2008 The first fall in UK house prices year on year is announced by Nationwide and followed later in the week by Halifax’s announcement of a 0.9% annual fall.
► 2 May 2008 The Federal Reserve and European Central Bank inject $82 billion into the money markets.
► 14 May 2008 Bradford & Bingley announces an emergency £300 million rights issue.
► 22 May 2008 UBS announces a $15.5 billion rights issue with its subprime losses having increased to $37 billion.
► 19 June 2008 Research shows that 190 hedge funds have been wound up in the previous 3 months.
► 25 June 2008 Barclays announces a £4.5 billion rights issue and sells a £1.7 billion stake in itself to the Qatar Investment Authority.
► 10 July 2008 Fannie Mae and Freddie Mac shares fall in value by 50% during the trading day.
► 11 July 2008 Indymac Bank is seized by the Federal Deposit Insurance Corporation following a run on the bank.
► 14 July 2008 The US authorities announce that they are stepping in to support Fannie Mae and Freddie Mac which have a combined $5.5 trillion of mortgage-related assets.
► 23 July 2008 President George W. Bush backs a plan to save Fannie Mae and Freddie Mac.
► 30 July 2008 Lloyds Bank announces £1.09 billion write down on structured finance holding and investments.
► 8 August 2008 Royal Bank of Scotland announcees a write off of £5.9 billion on assets affected by the credit crunch.
► 1–6 September 2008 Stockmarkets around the world have one of their worst weeks.
► 7 September 2008 The US government announces the biggest rescue in US corporate history as Fannie Mae and Freddie Mac are placed into ‘conservatorship’ (nationalization by any other name).
► 10 September 2008 Lehman Brothers announces a $3.9 billion loss for the quarter.
► 15 September 2008 Lehman Brothers files for Chapter 11 bankruptcy and Merrill Lynch agrees to be taken over by Bank of America for $50 billion.
► 16 September 2008 The US government announces an $85 billion rescue of the world’s biggest insurer American International Group which had heavy losses in credit default swaps in return for an 80% stake in the company.
► 17 September 2008 Lloyds TSB announce a £12 billion takeover of Halifax Bank of Scotland (HBOS), the UK’s largest mortgage provider. The regulatory authorities allow the takeover which would normally have been referred due to the combined group having close to a 1/3 share of the UK savings and loan market.
► 18 September 2008 The Federal Reserve announces a $180 billion increase in swap facilities with the European Central Bank, Swiss National Bank, Bank of England, Bank of Canada and Bank of Japan.
► 25 September 2008 Washington Mutual with assets of $307 billion is closed down by regulators (Office of Thrift Supervision) and sold off for $1.9 billion to JP Morgan following a run on its deposits, with $16.9 billion being withdrawn in the preceding 10 days.
► 28 September 2008 Fortis, a European Banking and Insurance group, is rescued through part-nationalization (49% stake) in return for a capital injection of €11.2 billion from the central banks of Belgium (€4.7 billion), Netherlands (€4 billion) and Luxembourg (€2.5 billion). The Bank had made major losses after taking a €24 billion stake in the Dutch bank ABN Amro, which had huge losses on its books from its subprime exposures. US law makers announce that they have agreed on a $700 billion bailout fund designed to purchase distressed assets from US banks.
► 29 September 2008 The Dow Jones index falls 770 points (its biggest ever points fall) or 7.7% following rejection of the proposed $700 billion bailout plan by Congress. Bradford & Bingley, a British mortgage provider, is nationalized. Its £50 billion of mortgage-loan book is taken over by the British government and its savings business sold to the Spanish bank Santander. Iceland’s government takes a 75% controlling interest of its third largest bank, Glitner, with a €600 million capital injection.
► 30 September 2008 Dexia Bank is rescued by the Belgian, Dutch and French governments with a €6.4 billion package. The Irish government announces a decision to protect all Irish bank deposits for the next two years.
► 3 October 2008 The $700 billion bailout package is passed by the House of Representatives. The Financial Services Authority raises the limit on insured deposits from £35,000 to £50,000, which protects 98% of retail deposits.
► 6 October 2008 Germany announces a €50 billion rescue package of Hypo Real Estate, one of its biggest banks, and gives an unlimited guarantee on German bank deposits. A similar bank deposit guarantee is announced by the Danish government. Iceland announces a package to rescue its banking system.
► 7 October 2008 The Icelandic government takes control of its second largest bank, Landsbanki, which owns Icesave bank in the UK, causing concerns for UK depositors who have their accounts frozen.
► 8 October 2008 The UK government announces a £50 billion rescue of its banking system in return for preferred shares, along with £100 billion of lending support from the Bank of England and £250 billion of loan guarantees on interbank lending. The Federal Reserve, European Central Bank (ECB), Bank of England, and the central banks of Canada, Sweden and Switzerland make a coordinated 0.5% interest rate cut, making the Federal Funds rate 1.5%, the ECB rate 3.75%, and the UK base rate 4.5%.
► 10 October 2008 Large falls in stockmarkets in the UK, Germany and France of 7% to 9%, with Wall Street having fallen 20% in the preceding 10 days.
► 11 October 2008 Finance ministers from the G7 industrialized nations announce a five-point plan to unfreeze the credit markets, protect savers, provide liquidity, strengthen financial institutions and restore confidence by taking an appropriate regulatory response.
► 13 October 2008 The UK government announces a £37 billion package to inject capital into three of its biggest banks: Lloyds TSB, HBOS and the Royal Bank of Scotland.
► 14 October 2008 The US government announces a $250 billion programme to buy stakes in the form of preference shares in US banks and to insure newly issued debt by the banks on a temporary basis.
► 15 October 2008 The Dow Jones falls 733 points or 7.87%, its biggest one-day percentage fall since the stockmarket collapse of 26 October 1987.
► 30 October 2008 The Federal Reserve cuts the Federal Funds rate from 1.5% to 1%. European governments agree a €1 trillion facility to guarantee interbank lending in the Euro area.
► 6 November 2008 The International Monetary Fund (IMF) announces a $16.4 billion loan rescue package for Ukraine. The Bank of England cuts its base rate from 4.5% to 3%, the lowest level since 1955. The ECB also cuts its rate from 3.75% to 3.25%.
► 9 November 2008 China announces a $568 billion stimulus package for its economy.
► 12 November 2008 The USA abandons its plan to use the $700 billion to buy distressed assets from the banks and instead decides to concentrate the funds on improving the flow of consumer credit.
► 14 November 2008 G20 meeting of developed and developing nations discusses the financial crisis and longer-term reform issues.
► 20 November 2008 The IMF extends a $2.1 billion loan to Iceland following the collapse of its banking system
► 23 November 2008 The US government announces a $20 billion rescue package for Citigroup following a 60% collapse in its share price in the preceding week.
► 24 November 2008 The UK government announces a one-year cut in value added tax from 17.5% to 15% to stimulate consumer demand, as part of a £25.6 billion stimulus package equivalent to 1.1% of UK GDP.
► 25 November 2008 The US Federal Reserve announces it will inject a further $800 billion of support to the financial system: $600 billion to purchase mortgage backed securities (including $100 billion from Fannie Mae and Freddie Mac) and $200 billion to encourage consumer lending (by buying up securitized debt in credit cards, auto loans and credit card debt).
► 26 November 2008 The European Commission announces a coordinated €200 billion economic recovery plan financed by the member states and designed to stimulate the European economy with a targeted 1.2% fiscal stimulus.
► 4 December 2008 President Sarkozy announces a €25 billion package to stimulate public sector investment and loans to the French car industry.
► 11 December 2008 Bank of America announces 35,000 job losses. The Bank of England cuts its base rate from 3% to 2%, its lowest for 57 years. The ECB cuts it policy rate from 3.25% to 2.5%. Sweden cuts its policy rate from 3.75% to 2%.
► 16 December 2008 The Federal Reserve cuts its Federal Fund rate from 1% to a 0–0.25% target range, the lowest in its history.
► 19 December 2008 George W. Bush announces that $17.4 billion of the $700 billion TARP fund will be used to bail out the big three auto companies: Chrysler, General Motors and Ford.
► 29 December 2008 The US Treasury announces a $6 billion rescue package for General Motors Acceptance Corporation, the financing arm of General Motors.
► 8 January 2009 The Bank of England cuts its base rate to 1.5%, the lowest in its 315-year history.
► 9 January 2009 US jobless rate rises to 7.2%, its highest in 16 years.
► 12 January 2009 Angela Merkel announces a €50 billion stimulus package for the German economy including investment in railways, roads and schools, tax cuts and tax relief. China announces the largest drop in exports for a decade.
► 14 January 2009 The UK government announces £14 billion in loans to small and medium-sized businesses.
► 15 January 2009 The ECB cuts its key interest rate to 2%. The Irish government nationalizes Anglo Irish Bank.
► 16 January 2009 The US government lends $20 billion to Bank of America following losses from its takeover of Merrill Lynch.
► 19th January 2009 The UK government announces a further bailout of the UK banking system, with £50 billion being set aside for lending to large corporations and an Asset Protection Scheme to insure around £600 billion of toxic bank assets.
► 24 January 2009 President Obama announces an economic recovery package including expenditure on electricity power lines.
► 28 January 2009 The International Labour Office forecasts 51 million job losses worldwide as a result of the credit crunch.
► 2 February 2009 France announces a €33.1 billion economic stimulus package.
► 5 February 2009 The Bank of England cuts its base rate from 1.5% to 1%.
► 10 February 2009 US Treasury Secretary Tim Geithner announces that stress tests will be conducted on 19 of the largest US banks with assets over $100 billion each.
► 13 February 2009 Germany passes its €50 billion stimulus package.
► 17 February 2009 President Obama signs a $787 billion economic stimulus programme aimed at saving/creating 3.5 million jobs, calling it ‘the most sweeping recovery package in our history’.
► 26 February 2009 The Royal Bank of Scotland announces its participation in the Asset Protection Scheme by insuring some £325 billion of its assets against future losses in return for a £6.5 billion premium to the government.
► 2 March 2009 AIG announces a $61.7 billion loss for the third quarter of 2008, the largest in US corporate history.
► 5 March 2009 The Bank of England reduces its base rate from 1% to 0.5% and announces a £75 billion policy of quantitative easing.
► 14 March 2009 The G20 meeting in London pledges a sustained effort to pull the global economy out of recession.
► 18 March 2009 The Federal Reserve announces it will buy approximately $1.2 trillion of debt in a bid to boost lending and economic recovery: $300 billion in Treasury purchases, $750 billion in mortgage backed securities and $100 billion in debt issue by Fannie Mae and Freddie Mac.
► 27 March 2009 Lloyds HBOS announces its participation in the Asset Protection Scheme by insuring some £260 billion of its assets against future losses in return for a £25.6 billion premium to the government.
► 2 April 2009 Meeting of the G20 in London pledges measures totalling $1.1 trillion to stave off recession in the global economy.
► 5 April 2009 Japan announces a $100 billion stimulus package.
► 22 April 2009 The IMF predicts financial losses from the credit crunch could total £4 trillion with $2.7 trillion of losses for banks and $1.3 trillion for other financial institutions.
► 7 May 2009 The Federal Reserve announces the results of its stress tests on 19 leading US banks. Ten out of the 19 banks are required to produce plans to raise $74.6 billion in capital by 8 June 2009 and complete the capital raising by November. The capital could be raised by issuance of new equity or asset sales. In the event of failing to raise the capital then the banks would receive funds from the Treasury in return for stakes in the companies.
► 8 May 2009 The ECB announces it is to engage in €60 billion of covered euro-denominated bonds and cuts its benchmark interest rate to 1%. The Bank of England announces a further £50 billion of quantitative easing for the five months from March 2009, bringing its total to £125 billion.
► 1 June 2009 The world’s largest car maker, General Motors, goes into bankruptcy.
► 10 June 2009 Ten of the largest US banks announce they are able to repay the US government $68 billion of TARP money.
► 17 June 2009 The US Treasury announces plans for reform of the banking system, including higher capital requirements for large banks, regulation of securitized assets, consumer mortgage protection, powers to take over failing banks and global regulatory standards.
► 16 July 2009 Ben Bernanke talks about the ‘exit strategy’ of the Federal Reserve following its handling of the credit crunch.
► 6 August 2009 The Bank of England announces an increase in its quantitative easing policy from £125 billion to £175 billion.
► 25 August 2009 President Obama reinstates Ben Bernanke as Chairman of the Federal Reserve.
► 27 August 2009 FDIC announces the number of ‘problem banks’ has increased to 416 institutions with $300 billion of assets.
► 1 November 2009 CIT Group files for Chapter 11 bankruptcy wiping out the $2.8 billion stake taken out by the US government in December 2008.
► 5 November 2009 Fannie Mae reports net loss of $18.9 billion for Q3 2009, a total of $111 billion since Q3 2008.
► 2 December 2009 Bank of America announces it will buy back $45 billion of preferred stock issued to the US government under the TARP
► 14 December 2009 Wells Fargo and Citigroup announce they will buy back a combined $45 billion of preferred stock issued to the US government under the TARP
