Great Recession/Timelines: Difference between revisions
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imported>Chris Day (→2008-2009 The international policy response: Nick, this is what I was going to do. For them, obviously a lot more time consuming but in the long term possibly the way we want to go) |
imported>Nick Gardner (a return to the practice for timeline facts that has been widely adopted elsewhere) |
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==2002-2007 US housing boom and bust == | ==2002-2007 US housing boom and bust == | ||
* The average price of a US house increased by about 70% between 2000 and 2006 | * The average price of a US house increased by about 70% between 2000 and 2006 [http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_112766.pdf] and then fell to 6.5% below the 2006 peak by July 2007[http://money.cnn.com/2007/05/14/real_estate/first_quarter_NAR_prices/index.htm]. | ||
* [[subprime mortgage crisis/Timelines#2007| The subprime mortgage crisis]] - including losses from [[mortgage]] [[default (finance)|defaults]] by the ''Bear Stearns'' bank's [[hedge fund]]s | * [[subprime mortgage crisis/Timelines#2007| The subprime mortgage crisis]] - including losses from [[mortgage]] [[default (finance)|defaults]] by the ''Bear Stearns'' bank's [[hedge fund]]s [http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aYDTeHYnV3ms] and the [[bankruptcy]] of the ''American Home Mortgage Corporation'' [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2208983.ece].. | ||
==2007-2008 International financial panic== | ==2007-2008 International financial panic== | ||
* August 9: The French bank ''BNP Paribas'' freezes its funds because it is unable to value their mortgage-backed assets. | * August 9: The French bank ''BNP Paribas'' freezes its funds because it is unable to value their mortgage-backed assets. [http://invest.bnpparibas.com/en/news/default.asp?Code=LPOI-75W9PV] | ||
* September 12 The ''Lehman Brothers'' [[investment bank]] becomes [[bankruptcy|bankrupt]] | * September 12 The ''Lehman Brothers'' [[investment bank]] becomes [[bankruptcy|bankrupt]][http://www.lehman.com/press/pdf_2008/091508_lbhi_chapter11_announce.pdf] with losses of up to $160 billion to holders of its unsecured bonds prompting a sudden loss of confidence in [[money market]] funds and the onset of a [[credit crunch]]. | ||
* [[Crash of 2008/Timelines#The Crash|The crash of 2008]] | * [[Crash of 2008/Timelines#The Crash|The crash of 2008]] | ||
==2008-2009 The international | ==2008-2009 The international response== | ||
'''The Banking systems rescues.''' | '''The Banking systems rescues.''' | ||
* The UK's Gordon Brown offers unlimited support to all UK banks by capital support, equity purchase and lending guarantees | * The UK's Gordon Brown offers unlimited support to all UK banks by capital support, equity purchase and lending guarantees [http://news.bbc.co.uk/1/hi/business/7658307.stm] [http://news.bbc.co.uk/1/hi/business/7658277.stm], and similar action is agreed by European Union leaders [http://www.latimes.com/business/la-fg-euecon13-2008oct13,1,7737780.story] and the US President[http://www.whitehouse.gov/news/releases/2008/10/20081014.html]and there are rescues of individual banks in Europe [http://www.ft.com/cms/s/0/f93a9b08-91ad-11dd-b5cd-0000779fd18c.html][http://www.dw-world.de/dw/article/0,2144,3692522,00.html] [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4894402.ece][http://www.newsvine.com/_news/2008/08/25/1782809-danish-central-bank-rescues-nations-no-10-bank] and the United States [http://www.dw-world.de/dw/article/0,2144,3692522,00.html]. | ||
'''The coordinated monetary stimulus'''. | '''The coordinated monetary stimulus'''. | ||
* A [[discount rate]] cut of half per cent by the [[central bank]]s of the United States, Europe, China, Britain, Canada, Sweden and Switzerland | * A [[discount rate]] cut of half per cent by the [[central bank]]s of the United States, Europe, China, Britain, Canada, Sweden and Switzerland [http://news.bbc.co.uk/1/hi/business/7658958.stm]. | ||
'''Agreement on a collective [[fiscal stimulus]]''' | '''Agreement on a collective [[fiscal stimulus]]''' | ||
* November 15: The first [[G20 summit]] of leaders of the [[Group of Twenty]] countries agree to take expansionary fiscal action | * November 15: The first [[G20 summit]] of leaders of the [[Group of Twenty]] countries agree to take expansionary fiscal action | ||
* The [[money market]] panic persists ([[LIBOR]]-[[OIS]] [[spread]]s reach over 350 [[basis point]]s (compared with August 2007 rates of around 10 points)[http://research.stlouisfed.org/publications/es/08/ES0825.pdf].) | |||
'''Domestic measures''' | '''Domestic measures''' | ||
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* 16 The US [[Federal Reserve System|Federal Reserve]] begins [[credit easing]] - using [[open market operations]] to raise the amount of [[base money]] from $0.9 trillion to $2.2 trillion [http://online.wsj.com/article/SB122948091644013041.html] | * 16 The US [[Federal Reserve System|Federal Reserve]] begins [[credit easing]] - using [[open market operations]] to raise the amount of [[base money]] from $0.9 trillion to $2.2 trillion [http://online.wsj.com/article/SB122948091644013041.html] | ||
--> | --> | ||
==2009 Global downturn and (patchy) recovery == | ==2009 Global downturn and (patchy) recovery == | ||
* [[Recession of 2009/Timelines#2009, 1st quarter|The recession of 2009]] | * [[Recession of 2009/Timelines#2009, 1st quarter|The recession of 2009]] | ||
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===January.=== | |||
* 19 UK Fiscal and monetary stimulus [http://www.hm-treasury.gov.uk/press_05_09.htm] | |||
* 19 UK '' Asset Protection Scheme'' [http://www.hm-treasury.gov.uk/press_07_09.htm] protection against credit losses in return for a fee. | |||
===February.=== | |||
* 9 The US ''Financial Stability Plan''[http://www.financialstability.gov/docs/fact-sheet.pdf] - including [[stress test (banking)|stress tests]] and capital assistance for major banks, a $500-1000 billion ''Public-Private Investment Fund''[http://www.ustreas.gov/press/releases/tg65.htm], consumer and business lending and housing support. | |||
* 13. The ''American Recovery and Reinvestment Act''(H.R. 1) [http://www.recovery.gov/About/Pages/The_Act.aspx]) - a $839 [[fiscal stimulus]] package including $288 billion in tax cuts and benefits, $224 billion in increased education and health spending, and a $275 billion for contracts, grants and loans. | |||
===March.=== | |||
* 3 The US ''Term Asset-backed Loan Facility ''[http://www.federalreserve.gov/monetarypolicy/20090303a.htm]. | |||
* The US ''Making Home Affordable'' Program [http://www.treas.gov/press/releases/reports/housing_fact_sheet.pdf] (provides public money to lenders to reduce a borrower’s monthly payments) | |||
===April.=== | |||
* The [[G20 summit]] agrees to increase [[International Monetary Fund|IMF]] funding to $750 billion; an increase in countries’ access to [[special drawing right]]s and $250 billion-worth of new global-trade guarantees. | |||
===May.=== | |||
* The [[European Central Bank]] cut its main policy interest rate by a quarter of a percentage point, to 1% | |||
* The [[Bank of England]] increases quantitative easing by raising central-bank reserves from £75 billion ($113 billion) to £125 billion. | |||
===June.=== | |||
* The [[European Central Bank]] lent €3 billion ($4.2 billion) to Sweden’s central bank | |||
* US banks repay $68 billion in loans they had received under the ''Troubled Asset Relief Program'' (including Morgan Chase, Goldman Sachs, Morgan Stanley and American Express). | |||
* 27 The [[European Central Bank]] provides a €442 billion loan to the euro area’s banking system through an offer of unlimited one-year funds at 1% interest. | |||
===July=== | |||
===August=== | |||
===September=== | |||
===October.=== | |||
* The Reserve Bank of Australia raised its main interest rate by 25 basis points, to 3.25%, | |||
===November=== | |||
===December.=== | |||
* 9 The UKs ''Fiscal Consolidation Plan''[http://www.hm-treasury.gov.uk/press_118_09.htm] | |||
* Greece’s [[credit rating agency|credit rating]] was downgraded to BBB+, with a negative outlook, by the ''Fitch'' [[credit rating agency]]. | |||
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==2009-201 The fiscal stability issue== | ==2009-201 The fiscal stability issue== | ||
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* The [[The European Central Bank]] discount rate is cut to 1 percent - the interest rate on the main refinancing operations of the [[Euro]] system be decreased by 25 basis points to 1.00%, from 13/05/09[http://www.ecb.int/press/pr/date/2009/html/pr090507.en.html]. ECB quantitative easing starts - with plans to buy €60bn worth of bonds. [http://www.ecb.int/press/pressconf/2009/html/is090507.en.html] ECB balance sheet total reaches €2,000 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf]. | * The [[The European Central Bank]] discount rate is cut to 1 percent - the interest rate on the main refinancing operations of the [[Euro]] system be decreased by 25 basis points to 1.00%, from 13/05/09[http://www.ecb.int/press/pr/date/2009/html/pr090507.en.html]. ECB quantitative easing starts - with plans to buy €60bn worth of bonds. [http://www.ecb.int/press/pressconf/2009/html/is090507.en.html] ECB balance sheet total reaches €2,000 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf]. | ||
* Ireland's supplementary budget - a number of tax increases and public expenditure cuts designed to reduce the deficit to 10.75 per cent of GDP for 2009 [http://www.budget.gov.ie/2009SupApril09/FinancialStatement.html]. | * Ireland's supplementary budget - a number of tax increases and public expenditure cuts designed to reduce the deficit to 10.75 per cent of GDP for 2009 [http://www.budget.gov.ie/2009SupApril09/FinancialStatement.html]. | ||
* The [[Bank of England]]'s [[discount rate]] is to reduced to0.5% and announces £75 billion asset purchase under its Asset Purchase Scheme [http://www.bankofengland.co.uk/markets/apf/ ] The Bank of England's balance sheet total reaches £227 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf ] | * The [[Bank of England]]'s [[discount rate]] is to reduced to0.5% and announces £75 billion asset purchase under its Asset Purchase Scheme [http://www.bankofengland.co.uk/markets/apf/] The Bank of England's balance sheet total reaches £227 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf] | ||
====Asia==== | ====Asia==== | ||
: The Bank of Japan's balance sheet total reaches Y110,000 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf]. | : The Bank of Japan's balance sheet total reaches Y110,000 billion [http://www.imf.org/external/pubs/ft/gfsr/2009/02/pdf/text.pdf]. | ||
<references/> | <references/> | ||
Revision as of 00:56, 13 March 2010
2002-2007 US housing boom and bust
- The average price of a US house increased by about 70% between 2000 and 2006 [1] and then fell to 6.5% below the 2006 peak by July 2007[2].
- The subprime mortgage crisis - including losses from mortgage defaults by the Bear Stearns bank's hedge funds [3] and the bankruptcy of the American Home Mortgage Corporation [4]..
2007-2008 International financial panic
- August 9: The French bank BNP Paribas freezes its funds because it is unable to value their mortgage-backed assets. [5]
- September 12 The Lehman Brothers investment bank becomes bankrupt[6] with losses of up to $160 billion to holders of its unsecured bonds prompting a sudden loss of confidence in money market funds and the onset of a credit crunch.
2008-2009 The international response
The Banking systems rescues.
- The UK's Gordon Brown offers unlimited support to all UK banks by capital support, equity purchase and lending guarantees [7] [8], and similar action is agreed by European Union leaders [9] and the US President[10]and there are rescues of individual banks in Europe [11][12] [13][14] and the United States [15].
The coordinated monetary stimulus.
- A discount rate cut of half per cent by the central banks of the United States, Europe, China, Britain, Canada, Sweden and Switzerland [16].
Agreement on a collective fiscal stimulus
- November 15: The first G20 summit of leaders of the Group of Twenty countries agree to take expansionary fiscal action
- The money market panic persists (LIBOR-OIS spreads reach over 350 basis points (compared with August 2007 rates of around 10 points)[17].)
Domestic measures
2009 Global downturn and (patchy) recovery