Great Recession/Timelines
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A timeline that provides links to news reports, for each of seven aspects of the Great Recession.
For a consecutive sequence of the main events of the recession see the timelines of the subprime mortgage crisis, the crash of 2008, and the recession of 2009; and for an account of events in selected regions and countries see the addendum to this article
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 froze its funds because it is unable to value their mortgage-backed assets. [5]
- September 12 2008 The Lehman Brothers investment bank became 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.
2008-2009 The policy response
Financial policy
- The UK offered unlimited support to all UK banks by capital support, equity purchase and lending guarantees [8] [9], and similar action was agreed by European Union leaders [10], the Bank of Japan[11] and the US President[12]and there are rescues of individual banks in Europe [13][14] [15][16] and the United States [17].
Rescue measure US Japan UK Germany France Italy Increase deposit insurance x x x [1] x Guarantee or buy bad debts x x x x x Inject capital x x x x x Nationalise x x Ring fence bad assets x x Plan to purchase toxic assets x x
- Source: OECD Economic Outlook March 2009 Table 1.4 [18]
Monetary policy
- Coordinated monetary policy in the form of a discount rate cut of a half per cent was taken by the central banks of the United States, Europe, China, Britain, Canada, Sweden and Switzerland [19](in October) followed by progressive reductions to reach 1/4 per cent in the United States[20]. (December), 1/2 per cent in the United Kingdom [21] (March) and 1 per cent in the Eurozone[22] (May)
- Quantitative easing (or "credit easing" in the case of the United States) was introduced by the central banks of the United States[23][24][25] (in December), the United Kingdom[26] (in January) and the Eurozone[27] (in May).
Fiscal policy
- The first G20 summit of leaders of the Group of Twenty countries agreed to adopt expansionary fiscal policies (November 2008)
- Fiscal stimulus packages ranging from 1.3 per cent of GDP (France) to 4.8 per cent of GDP (United States) were launched in 2008 and early 2009 by the G7 countries and China.