Great Recession/Timelines

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]..

2007-2009 International financial panic

• August 9 2007: The French bank BNP Paribas freezes its funds because it is unable to value their mortgage-backed assets. [5]

• The crash of 2008

• September 12 2008 The Lehman Brothers investment bank becomes bankrupt[6][7] 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.

• The recession of 2009

2008-2009 The policy response

Financial policy

• The UK offers unlimited support to all UK banks by capital support, equity purchase and lending guarantees [8] [9], and similar action is agreed by European Union leaders [10] and the US President[11]and there are rescues of individual banks in Europe [12][13] [14][15] and the United States [16].

Monetary policy

• A coordinated discount rate cut of half per cent by the central banks of the United States, Europe, China, Britain, Canada, Sweden and Switzerland [17](in October) followed by progressive reductions to reach 1/4 per cent in the United States[18]. (December), 1/2 per cent in the United Kingdom [19] (March) and 1 per cent in the Eurozone[20] (May)
• Quantitative easing (or "credit easing" in the case of the United States) is introduced by the central banks of the United States[21][22][23] (in December), the United Kingdom[24] (in January) and the Eurozone[25] (in May).

Fiscal policy

• November. The first G20 summit of leaders of the Group of Twenty countries agree to take expansionary fiscal action

2009 Global downturn and (patchy) recovery

• The recession of 2009
• The patchy recovery