Crash of 2008/Timelines: Difference between revisions
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===March=== | ===March=== | ||
'''Bear Stearns rescued''' [http://www.reuters.com/article/topNews/idUSN1438968020080315] | '''Bear Stearns rescued''' [http://www.reuters.com/article/topNews/idUSN1438968020080315] - the bank is purchased by JPMorgan Chase for $2 a share (compared with previous week's market price of $18 and previous October's price of $131), supported by Treasury Department guarantees limiting losses on the purchase to $1 billion, and by Federal Reserve purchases of $30 billion of Bear's Assets. | ||
===April=== | ===April=== | ||
Revision as of 10:45, 12 November 2009
See also the subprime mortgage crisis timelines [1], and for earlier bank failures and rescues see the bank failures and rescues timelines [2].
Sources
In addition to the sources that can be reached using the internet links shown thus [99], this timeline draws upon otherwise unpublished information obtained by interview and published in Fools Gold by Gillian Tett (see the bibliography subpage). Numbers shown thus {123} are the relevant page numbers in that book.
The 1980s
- Financial deregulation In the USA, [3][4], the UK [5] and elsewhere [6].
- Savings and Loans crisis- Failure of 296 US "Savings and Loans" mortgage lenders [7]
The 1990s
The decade
- Banking crises in Switzerland, United Kingdom, Norway, Sweden, Japan and the US [9].
- Failure of a further 451 US "Savings and Loans" mortgage lenders.
- 1997-8 Asian banking crisis [10].
- 1998 LTCM rescue [11]
- 1999 Savings and Loans rescue costs to US taxpayers reach $129 billion [12].
2000-2006
- 'Dot com' crash (2000)
- US mortgage (housing) mortgage growth Annual issue of mortgage-backed bonds up from ~ $500 billion to over $2,000 billion [13]
- US housing boom Average price rises 80% [14] .
- US mortgage foreclosures increase [15].
- BIS economists warn that financial innovation increases vulnerability {180}
The year 2007 (summary)
US house prices fall throughout 2007 (fall 8% below 2006 peak) [16].
Further increases in US Mortgage defaults and foreclosures [17].
Large bank writedowns and losses at Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Citigroup and HSBC.
Interbank market collapse
2007
June
12 Two Bear Stearns hedge funds threatened by losses from mortgage defaults [18].
15 Moody's cuts its ratings on bonds totalling $3billion.
21 Bank of England Chairman Mervyn King's warning on risks of credit derivatives.
August
2 German IKB bank rescue [19]
6 American Home Mortgage bankrupt [20].
9 The European Central Bank announces the issue of 94 billion Euros requested by European banks {215}
French bank BNP Paribas freezes funds because it is unable to value its US mortgage-backed assets. [21]
Collapse of interbank market [22].
15 US major mortgage lender Countrywide announces large increase in subprime defaults.
17 US Federal Reserve cuts its discount rate by 0.5% to 5.75%.
31 US National Association of Realtors announce expected fall in house prices (the first since the 1930s)
September
13 BBC's Robert Peston reports that the Northern Rock bank was seeking help from the Bank of England.
UK Northern Rock bank run [23]
2008
January
US mortgage lender Countrywide sold to Bank of America after its share price drops by 48% [24].
February
Northern Rock bank nationalised[25].
March
Bear Stearns rescued [26] - the bank is purchased by JPMorgan Chase for $2 a share (compared with previous week's market price of $18 and previous October's price of $131), supported by Treasury Department guarantees limiting losses on the purchase to $1 billion, and by Federal Reserve purchases of $30 billion of Bear's Assets.
April
Global subprime crisis costs could reach $1 trillion (IMF estimate) [27].
IMF forecasts US recession and world growth slowdown [28].
Bank of England announces Special Liquidity Scheme [29].
June
US house prices 20% below 2006 peak [30].
August
Fannie Mae and Freddie Mac rescued [31].
September
7 Fannie Mae and Freddie Mac nationalised [32].
12 Lehman Brothers bankrupt[33] with losses of $365 billion to insurers of its bonds.
- Negotiations with possible private sector rescuers fail {274} and there isNo government rescue [34]
16 $785m Lehman funds written off - money market investors suffer massive loss [35].
- Money market panic {278}
17 American Insurance Group nationalised [36].
- UK's Halifax/Bank of Scotland (HBOS) accepts rescue bid from Lloyds TSB [37].
18 Paulson Rescue plan proposed (US Treasury scheme to take "toxic assets" out of the US banking system) [38]
- UK temporary ban on short selling [39].
19 Fed supports money markets Federal Reserve Bank ready to finance loans from the money market [40].
23 Federal Reserve Bank protects Goldman Sachs and Morgan Stanley banks[41].
26 Washington Mutual closed by regulator. Assets sold to JPMorgan Chase [42].
- Coordinated support by US, UK, European and Swiss central banks [43].
28 UK bank Bradford and Bingley nationalised [44].
- Multiple European bank rescues [45].
30 Icelandic Glitnir bank nationalised [46].
October
3 Modified $700 billion Paulson Plan (to purchase toxic assets) approved by Congress [47].
- Dutch Fortis and ABN Amro banks nationalised [48].
- German Hypo Real Estate bank rescued [49]
- Icelandic economic crisis" [50].
6 US Wachovia Corp to be rescued by Wells Fargo takeover [51].
7 More European bank rescues [52].
- UK credit insurer withdraws cover [53].
8 £500 billion UK rescue plan (the "Brown plan" to inject capital, take equity in banks and guarantee interbank lending) [54] [55].
- Coordinated interest rate cut of half per cent by the central banks of the United States, Europe, China, Britain, Canada, Sweden and Switzerland [56].
10 G7 Action Plan agreed by finance ministers (in a broadly worded statement, lacking in specifics) [57].
12 EU leaders adopt UK rescue plan (to inject capital, take equity in banks and guarantee interbank lending) [58].
14 President Bush announces new plans (to inject capital, take equity in banks and guarantee interbank lending) [59].
19 German bank rescue package agreed [60].
21 US Federal Reserve Bank offers $540 billion loan support to money market mutual funds [61].
25 Denmark's Roskilde bank to be taken over by its central bank [62].
November
12 US government plan to purchase "toxic assets" abandoned [63] [64]
23 Citigroup Rescue - US government makes $20 billion cash injection and guarantees against loss on $306 billion of iliquid assets [65] [66] [67][68]
- US Federal Reserve Bank promises to buy up to $500 billion worth of mortgage-backed securities guarantee by Fannie Mae and Freddie Mac and up to $100billion worth of their direct debt [69].
- (for later events see the recession of 2009 timeline [70])