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 and then fell to 6.5% below the 2006 peak by July 2007.
• The subprime mortgage crisis - including losses from mortgage defaults by the Bear Stearns bank's hedge funds and the bankruptcy of the American Home Mortgage Corporation .

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.

• September 12 The Lehman Brothers investment bank becomes bankrupt 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 crash of 2008

2008-2009 The international policy 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 , and similar action is agreed by European Union leaders and the US Presidentand there are rescues of individual banks in Europe and the United States .

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 .

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).)

Domestic measures

2009 Global downturn and (patchy) recovery

• The recession of 2009
• The patchy recovery