Crash of 2008/Timelines: Difference between revisions

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''See also the [[Subprime mortgage crisis/Timelines|subprime mortgage timeline]], the [[Bank failures and rescues/Timelines|bank failures and rescues timeline]]and the [[Recession of 2009/Timelines|recession of 2009 timeline]]''


:''(for earlier bank failures and rescues see the bank failures and rescues timelines [http://en.citizendium.org/wiki/Bank_failures_and_rescues/Timelines].)''
==Deregulation and pre-Crash crisis (1980 - 2000) ==
* Banking [[Banking#Deregulation| deregulation]] measures are introduced in  the USA, [http://www.fdic.gov/regulations/laws/rules/8000-4100.html][http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html], the UK [http://www.legislation.gov.uk/RevisedStatutes/Acts/ukpga/1986/cukpga_19860053_en_1] and elsewhere [http://www.bis.org/publ/econ43.pdf?noframes=1].


==The 1980s==
* In the US [[Bank failures and rescues# The United States Savings and Loans crisis| Savings and Loans crisis]] - 296 US "Savings and Loans" mortgage lenders  fail[http://www.fdic.gov/bank/analytical/banking/2000dec/brv13n2_2.pdf] [http://www.fdic.gov/bank/analytical/banking/2000dec/brv13n2_2.pdf] (1986–1995).
*'''[[Financial deregulation]]''' In the USA [http://landru.i-link-2.net/monques/dereg80.html], [http://www.fdic.gov/regulations/laws/rules/8000-4100.html], the UK [http://www.legislation.gov.uk/RevisedStatutes/Acts/ukpga/1986/cukpga_19860053_en_1] and elsewhere [http://www.bis.org/publ/econ43.pdf?noframes=1].


*'''[[Savings and Loans crisis]]'''- Failure of 296 US "''Savings and Loans''" mortgage lenders [http://www.fdic.gov/bank/analytical/banking/2000dec/brv13n2_2.pdf]
* The 1987 stock market crash [http://www.federalreserve.gov/Pubs/feds/2007/200713/200713pap.pdf].


*'''[[1987 stock market crash|1987]][[1987 stock market crash]]''' [http://www.federalreserve.gov/Pubs/feds/2007/200713/200713pap.pdf].
* There are [[Bank failures and rescues|banking crises]] in Switzerland, United Kingdom, Norway, Sweden, Japan and the United States [http://www.bis.org/publ/bcbs_wp13.pdf?noframes=1].


==The 1990s==
* The [[Bank failures and rescues#The Asian banking crisis|Asian banking crisis]] [http://www.eastwestcenter.org/fileadmin/stored/pdfs/api078.pdf] ( 1997-8).


===The decade===
* The ''Long Term Capital Management'' [[hedge fund]] fails and is rescued[http://www.treasury.gov/press/releases/reports/hedgfund.pdf] (1998)
*:Banking crises in Switzerland, United Kingdom, Norway, Sweden, Japan and the US [http://www.bis.org/publ/bcbs_wp13.pdf?noframes=1].


*:Failure of a further 451 US "Savings and Loans" mortgage lenders.
* The "Dot.com" crash (2000)


*1997-8 Asian banking crisis [http://www.eastwestcenter.org/fileadmin/stored/pdfs/api078.pdf].
==Prelude to the Crash (2001 - June 2007)==
* The annual issue of  US mortgage-backed bonds increases from ~ $500 billion to over $2,000 billion [http://news.bbc.co.uk/1/hi/business/7302341.stm]


*1998 LTCM <!--whazzat??-->rescue [http://www.treasury.gov/press/releases/reports/hedgfund.pdf]
* 2001 to Q3 2006 A US housing boom  in which the average price rises by 80% [http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_102626.xls] .


*1999 Savings and Loans rescue costs to US taxpayers reach $129 billion [http://www.fdic.gov/bank/analytical/banking/2000dec/brv13n2_2.pdf].
* : The Federal Reserve makes a series of [[discount rate]] increases (increasing the federal funds rate from 1 per cent in 2003 to 5.25 per cent in 2006)[http://www.harpfinancial.com/InterestRateHistory/FederalFundsRate.htm].


==2000-2006==
* Q3 2006 to Q2 2007 US house prices fall to 8% below 2006 peak ()[http://money.cnn.com/2007/05/14/real_estate/first_quarter_NAR_prices/index.htm].


*[[Internet company|'Dot com']] <!--is that the right name?--> crash (2000)
* US mortgage foreclosures surge [http://realestate.msn.com/buying/articlenewhome.aspx?cp-documentid=340866] [http://news.bbc.co.uk/1/hi/business/7073131.stm].


*'''US [[mortgage (housing)]] mortgage growth''' Annual issue of mortgage-backed bonds up from ~ $500 billion to over $2,000 billion [http://news.bbc.co.uk/1/hi/business/7302341.stm]
* The values of  bank assets suffer large reductions  (including the assets of the ''Bank of America'' and ''Citigroup'' banks in the US, the ''Barclays'' and ''HSBC'' banks in the UK, the ''BNP Paribas'' bank in France, and ''Credit Suisse''  bank in Switzerland.


*'''US housing boom''' Average price rises 80% [http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_History_102626.xls] .
<small>
[[Crash of 2008/Timelines#Deregulation and pre-Crash crisis (1980 - 2000)|'''(RETURN TO TOP)''']]
</small>


*US mortgage '''[[foreclosure]]s increase''' [http://realestate.msn.com/buying/articlenewhome.aspx?cp-documentid=340866].
==The Crash stage 1  (June - July 2007)==


==The year 2007 (summary)==
===2007===


'''US house prices fall''' throughout 2007 (fall 8% below 2006 peak) [http://money.cnn.com/2007/05/14/real_estate/first_quarter_NAR_prices/index.htm].
====June ====
* Standard and Poor’s and Moody’s Investor Services downgrade over 100 bonds backed by  subprime mortgages.


Further increases in US Mortgage '''defaults and foreclosures'''  [http://news.bbc.co.uk/1/hi/business/7073131.stm].
*12 Two of the ''Bear Stearns'''' [[investment bank]]'s [[hedge fund]]s are threatened by losses from mortgage [[default (finance)|defaults]] [http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aYDTeHYnV3ms].


Large '''bank writedowns''' and losses at Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Citigroup and HSBC.
*15 The ''Moody's'' [[credit rating agency]] cuts its ratings on bonds totalling $3billion.


==2007==
====July====


===June===
*11 Standard and Poor’s places 612 securities backed by subprime residential mortgages on a credit watch.
25 Two [[Bear Stearns]] '''''hedge funds'' threatened''' by losses from mortgage defaults [http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aYDTeHYnV3ms].


===August===
<small>
[[Crash of 2008/Timelines#Deregulation and pre-Crash crisis (1980 - 2000)|'''(RETURN TO TOP)''']]
</small>


2 German '''IKB bank rescue''' [http://www.ft.com/cms/s/0/7017b0c0-411a-11dc-8f37-0000779fd2ac.html]
==The Crash stage 2 (August 2007 - September 2008)==


6 '''American Home Mortgage bankrupt''' [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2208983.ece].
===2007===


9 French bank '''BNP Paribas freezes funds''' because it is unable to value its US mortgage-backed assets. [http://invest.bnpparibas.com/en/news/default.asp?Code=LPOI-75W9PV]
====August====
* 2 Germany'''IKB'' bank is rescued from [[bankruptcy]] [http://www.ft.com/cms/s/0/7017b0c0-411a-11dc-8f37-0000779fd2ac.html]


:-'''Collapse of interbank market''' [http://www.gata.org/node/5802].
* 6 The ''American Home Mortgage'' becomes [[bankruptcy|bankrupt]] [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2208983.ece].


===September===
* 9 The [[European Central Bank]] announces the issue of 94 billion euros requested by European banks [http://www.nakedcapitalism.com/2007/08/ecb-makes-unprecedented-infusion-in.html]<br>


UK '''Northern Rock bank run''' [http://news.bbc.co.uk/1/hi/business/6996136.stm]
&nbsp;&nbsp;&nbsp; '''The French ''BNP Paribas'' bank freezes several of its [[fund (finance)|funds]] because it is unable to value their bonds that are backed by US house mortgages.''' [http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aNIJ.UO9Pzxw]<br>


==2008==
&nbsp;&nbsp;&nbsp; The [[interbank market]] suffers a virtual collapse [http://www.gata.org/node/5802].


===January===
* 15 The US major mortgage lender ''Countrywide'' announces a large increase in [[subprime mortgage]] defaults.


US mortgage lender '''Countrywide sold''' to Bank of America after its share price drops by 48% [http://news.bbc.co.uk/1/hi/business/7183221.stm].
* 17 The US [[Federal Reserve System|Federal Reserve]] cuts its [[discount rate]] by 0.5% to 5.75%.


===February===
* 31 The US ''National Association of Realtors'' announces an expected fall in house prices (the first since the 1930s)


'''Northern Rock''' bank '''nationalised'''[http://news.bbc.co.uk/1/hi/business/7249575.stm].
====September====
* 13 BBC's Robert Peston reports that the ''Northern Rock'' bank was seeking help from the Bank of England.<br>
&nbsp;&nbsp;&nbsp;&nbsp;UK ''Northern Rock'' bank [[Run (banking)| bank run]] [http://news.bbc.co.uk/1/hi/business/6996136.stm]


===March===
====December====
* 12 The Federal Reserve Board announces the creation of a Term Auction Facility (TAF) in which fixed amounts of term funds will be auctioned to depository institutions against a wide variety of collateral. The bank authorizes temporary reciprocal currency arrangements (swap lines) with the European Central Bank  and the Swiss National Bank . The Federal Reserve states that it will provide up to $20 billion and $4 billion to the European Central Bank  and the Swiss National Bank, respectively, for up to 6 months [http://www.federalreserve.gov/newsevents/press/monetary/20071212a.htm].


'''Bear Stearns rescued''' [http://www.reuters.com/article/topNews/idUSN1438968020080315]
<small>
[[Crash of 2008/Timelines#Deregulation and pre-Crash crisis (1980 - 2000)|'''(RETURN TO TOP)''']]
</small>


===April===
===2008===


Global subprime crisis costs could reach $1 trillion (IMF estimate) [http://www.iht.com/articles/2008/04/08/business/imf.php].
====January====
* US mortgage lender ''Countrywide'' sold to ''Bank of America'' after its share price drops by 48% [http://news.bbc.co.uk/1/hi/business/7183221.stm].


'''IMF forecasts US recession''' and world growth slowdown [http://news.bbc.co.uk/1/hi/business/7338326.stm].
====February====
* The ''Northern Rock'' bank is "nationalised'' [http://news.bbc.co.uk/1/hi/business/7249575.stm].


Bank of England announces Special Liquidity Scheme [http://www.bankofengland.co.uk/markets/sls/sls-information.pdf].
====March====
* '''The ''Bear Stearns'' [[investment bank]] is rescued '''[http://www.reuters.com/article/topNews/idUSN1438968020080315] - the  ''JP Morgan Chase'' bank agrees to buy ''Bear Stearns'' for $10 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. {GT258}


===June===
====April====
* The [[International Monetary  Fund]] estimates that the global  crisis costs could reach $1 trillion  [http://www.imf.org/external/pubs/ft/weo/2008/01/index.htm].


US house prices 20% below 2006 peak [http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,2,1,0,0,0,0,0.html].  
* Bank of England announces its ''Special Liquidity Scheme'' to allow banks to swap some of their [[Liquidity|illiquid]] assets for liquid Treasury [[Bills]] for up to three years [http://www.bankofengland.co.uk/markets/sls/sls-information.pdf].


===August===
====June====
* US house prices fall to 20% below  their 2006 peak [http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,2,1,0,0,0,0,0.html].


''' ''Fannie Mae'' and ''Freddie Mac'' rescued''' [http://nreionline.com/property/multifamily/real_estate_senate_okays_fannie/].
====July====
* The crude oil price peaks at $145 per barrel (compared with $70 in July 2007)[http://www.nyse.tv/crude-oil-price-history.htm]


===September===
====August====
* The government-sponsored  house mortgage lenders [[Fannie Mae]] and [[Freddie Mac]] are rescued from [[bankruptcy]] [http://nreionline.com/property/multifamily/real_estate_senate_okays_fannie/].


7  '''''Fannie Mae'' and ''Freddie Mac'' nationalised '''[http://www.foxbusiness.com/story/markets/government-seied-fannie-mae-freddie-mac/].
<small>
[[Crash of 2008/Timelines#Deregulation and pre-Crash crisis (1980 - 2000)|'''(RETURN TO TOP)''']]
</small>


==The Crash stage 3 (September - December 2008)==


12 '''Lehman Brothers  bankrupt'''[http://www.lehman.com/press/pdf_2008/091508_lbhi_chapter11_announce.pdf] with losses of $365 billion to insurers of its bonds.
===2008===
: '''No government rescue''' [http://www.nytimes.com/2008/10/23/business/economy/23paulson.html]


16 '''$785m Lehman funds written off''' - money market investors suffer massive loss [http://www.usnews.com/blogs/new-money/2008/9/17/reserve-primary-fund-investors-may-lose.html].
====September====
* 7 [[Fannie Mae]] and [[Freddie Mac]] are "nationalised" [http://www.foxbusiness.com/story/markets/government-seied-fannie-mae-freddie-mac/].


:'''Money market panic''' [http://news.yahoo.com/s/nm/20080919/bs_nm/financial_treasury_dc].
* 12''' The US ''Lehman Brothers'' [[investment bank]] is  [[bankruptcy|bankrupt]] '''[http://www.lehman.com/press/pdf_2008/091508_lbhi_chapter11_announce.pdf][http://lehmanreport.jenner.com/][http://www.sec.gov/news/testimony/2010/ts042010mls.htm] with losses of $365 billion to insurers of its bonds.
: Negotiations with possible private sector rescuers fail  [http://www.nytimes.com/2008/10/23/business/economy/23paulson.html]


* 16  $785m worth of  ''Lehman Brother's''  [[fund]]s are written off and [[money market]]  investors suffer a massive loss [http://www.usnews.com/blogs/new-money/2008/9/17/reserve-primary-fund-investors-may-lose.html].
: panic in the [[money market]]  and the virtual collapse of the [[interbank market]]


17 '''American Insurance Group nationalised''' [http://money.cnn.com/2008/09/16/news/companies/AIG/?postversion=2008091710].
*17 The ''American Insurance Group'' is  "nationalised" [http://money.cnn.com/2008/09/16/news/companies/AIG/?postversion=2008091710].


:UK's '''Halifax/Bank of Scotland (HBOS)''' accepts '''rescue''' bid from Lloyds TSB [http://news.bbc.co.uk/1/hi/business/7622380.stm].
*UK's ''Halifax/Bank of Scotland'' bank is rescued from [[bankruptcy]] by a bid from Lloyds TSB [http://news.bbc.co.uk/1/hi/business/7622380.stm].


18 '''Paulson Rescue plan''' proposed (US Treasury  scheme to take "toxic assets" out of the US banking system) [http://www.ft.com/cms/s/0/33d2214e-8968-11dd-8371-0000779fd18c.html]
*18 Paulson Rescue plan proposed (US Treasury  scheme to take "toxic assets" out of the US banking system) [http://www.ft.com/cms/s/0/33d2214e-8968-11dd-8371-0000779fd18c.html]


:UK temporary ban on ''short selling'' [http://news.bbc.co.uk/1/hi/business/7624012.stm].
* The UK Government imposes a temporary ban on [[Selling short|short selling]] [http://news.bbc.co.uk/1/hi/business/7624012.stm].


19 '''Fed supports money markets''' Federal Reserve Bank ready to finance loans from the ''money market'' [http://biz.yahoo.com/rb/080919/financial_fed.html?.v=5].  
* 19 [[The Federal Reserve System|Federal Reserve]] announces that it is  ready to finance loans from the [[money market]] [http://biz.yahoo.com/rb/080919/financial_fed.html?.v=5].  


23 '''Fed'''eral Reserve Bank '''protects''' '''Goldman Sachs''' and '''Morgan Stanley ''' banks[http://www.ft.com/cms/s/0/3119223e-8906-11dd-a179-0000779fd18c.html].
* 23 The Federal Reserve Board announces a scheme to protect the ''Goldman Sachs'' and ''Morgan Stanley '' investment  banks from failure [http://www.ft.com/cms/s/0/3119223e-8906-11dd-a179-0000779fd18c.html].


26 '''Washington Mutual closed''' by regulator. Assets sold to JPMorgan Chase [http://news.bbc.co.uk/1/hi/business/7637026.stm].
* 26 The ''Washington Mutual'' bank is  closed  and its assets are sold to the ''JP Morgan Chase'' bank [http://news.bbc.co.uk/1/hi/business/7637026.stm].


: Coordinated support by US, UK, European and Swiss central banks [http://news.bbc.co.uk/1/hi/business/7637097.stm].
* Coordinated support is provided to their banks  by US, UK, European and Swiss [[central bank]]s [http://news.bbc.co.uk/1/hi/business/7637097.stm].


28 UK bank '''Bradford and Bingley nationalised''' [http://news.bbc.co.uk/2/hi/business/7640143.stm].
* 28 The UK ''Bradford and Bingley'' is "nationalised" [http://news.bbc.co.uk/2/hi/business/7640143.stm].


: Multiple '''European bank rescues''' [http://uk.news.yahoo.com/rtrs/20080929/tbs-uk-fortis-7318940.html].
:Multiple European bank rescues [http://uk.news.yahoo.com/rtrs/20080929/tbs-uk-fortis-7318940.html].


30 Icelandic '''Glitnir bank nationalised''' [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4849302.ece].
* 30 Iceland's ''Glitnir'' bank is "nationalised" [http://business.timesonline.co.uk/tol/business
/industry_sectors/banking_and_finance/article4849302.ece].


===October===
: The Irish government announces that it will guarantee all deposits in Irish banks - assuming a  liability of €440 billion: more than twice Ireland’s gross domestic product[http://www.economist.com/node/12343013].


3 Modified  ''' $700 billion [[Paulson Plan]]''' (to purchase toxic assets) approved by Congress [http://news.bbc.co.uk/1/hi/world/americas/7651761.stm].
<small>
[[Crash of 2008/Timelines#Deregulation and pre-Crash crisis (1980 - 2000)|'''(RETURN TO TOP)''']]
</small>


:Dutch '''Fortis and ABN Amro banks nationalised''' [http://www.ft.com/cms/s/0/f93a9b08-91ad-11dd-b5cd-0000779fd18c.html].
====October 1-7====
* 3 The (modified)  $700 billion [[Paulson Plan]] (to purchase toxic assets) approved by Congress [http://news.bbc.co.uk/1/hi/world/americas/7651761.stm].


: German '''Hypo Real Estate bank rescued''' [http://www.dw-world.de/dw/article/0,2144,3692522,00.html]
: The Dutch ''Fortis'' and ''ABN Amro'' banks are "nationalised"  [http://www.ft.com/cms/s/0/f93a9b08-91ad-11dd-b5cd-0000779fd18c.html].


: '''Icelandic economic crisis" [http://news.bbc.co.uk/1/hi/business/7653750.stm].
: The German ''Hypo Real Estate'' bank is rescued [http://www.dw-world.de/dw/article/0,2144,3692522,00.html]


6 US '''Wachovia Corp to be rescued by Wells Fargo takeover''' [http://www.dw-world.de/dw/article/0,2144,3692522,00.html].
: Iceland suffers an economic crisis [http://news.bbc.co.uk/1/hi/business/7653750.stm].


7 More European bank rescues [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4894402.ece].
* 6 The US ''Wachovia Corporation'' is  to be rescued by a takeover by the ''Wells Fargo'' bank [http://www.dw-world.de/dw/article/0,2144,3692522,00.html].


:UK '''credit insurer withdraws cover''' [http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article4894115.ece].
* 7 More European bank rescues [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4894402.ece].


8  '''£500 billion UK rescue plan''' (the "Brown plan" to inject capital, take equity in banks and guarantee interbank lending) [http://news.bbc.co.uk/1/hi/business/7658307.stm] [http://news.bbc.co.uk/1/hi/business/7658277.stm].
:UK credit insurer withdraws cover [http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article4894115.ece].


: Coordinated interest rate cut of half per cent by the central banks of the United States, Europe, ChinaBritain, Canada, Sweden and Switzerland [http://news.bbc.co.uk/1/hi/business/7658958.stm].
==Systemic rescue==
====October====
* 8  UK Chancellor of the Exchequer announces unlimited support to all UK banks. His  £500 billion  ''bank rescue plan'' undertakes to inject capital or  take [[equity]] in banks and to guarantee [[interbank lending]], as required [http://news.bbc.co.uk/1/hi/business/7658307.stm] [http://news.bbc.co.uk/1/hi/business/7658277.stm].


10 G7 Action Plan agreed by finance ministers (in a broadly worded statement, lacking in specifics) [http://ap.google.com/article/ALeqM5gP-2pLnZlGnXKz5FDPQ6OTe-AM-QD93O5DEG0].
* 11 US President Bush  announces a similar bank rescue plan  [http://www.nytimes.com/2008/10/12/business/12imf.html].


12  '''EU leaders adopt UK rescue plan''' (to inject capital, take equity in banks and guarantee interbank lending)
* 12  European Union  leaders agree to adopt similar bank rescue plan [http://www.latimes.com/business/la-fg-euecon13-2008oct13,1,7737780.story].
[http://www.latimes.com/business/la-fg-euecon13-2008oct13,1,7737780.story].


14 '''President Bush announces new plans''' (to inject capital, take equity in banks and guarantee interbank lending) [http://www.whitehouse.gov/news/releases/2008/10/20081014.html].
* 19  A German bank rescue plan is agreed [http://www.spiegel.de/international/business/0,1518,585156,00.html].


19 German bank rescue package agreed [http://www.spiegel.de/international/business/0,1518,585156,00.html].
* 21 The US  Federal Reserve Bank offers $540 billion loan support to [[money market]] mutual funds [http://www.bloomberg.com/apps/news?pid=20601087&sid=ajw94.nC0a5w&refer=home].  


21 US Federal Reserve Bank offers $540 billion loan support to money market mutual funds [http://www.bloomberg.com/apps/news?pid=20601087&sid=ajw94.nC0a5w&refer=home].  
* 25 Denmark's  ''Roskilde'' is bank to be taken over by its [[central bank]] [http://www.newsvine.com/_news/2008/08/25/1782809-danish-central-bank-rescues-nations-no-10-bank].


25  Denmark's Roskilde bank to be taken over by its central bank [http://www.newsvine.com/_news/2008/08/25/1782809-danish-central-bank-rescues-nations-no-10-bank].
<small>
[[Crash of 2008/Timelines#Deregulation and pre-Crash crisis (1980 - 2000)|'''(RETURN TO TOP)''']]
</small>


===November===
====November====
* 12 A US government plan to purchase "toxic assets" is abandoned [http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/bailout_plan/index.html?inline=nyt-classifier] [http://www.treasury.gov/press/releases/hp1265.htm]


12 US government plan to purchase "toxic assets" abandoned [http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/bailout_plan/index.html?inline=nyt-classifier] [http://www.treasury.gov/press/releases/hp1265.htm]
* 23 The US ''Citigroup'' bank is rescued (the US government makes $20 billion cash injection and guarantees against loss on $306 billion of illiquid assets [http://www.nytimes.com/2008/11/24/business/24citibank.html?_r=1&scp=2&sq=Citigroup%20rescue&st=cse] [http://www.ustreas.gov/press/releases/hp1287.htm] [http://www.ustreas.gov/press/releases/reports/cititermsheet_112308.pdf][http://online.wsj.com/article/SB122747680752551447.html?mod=special_page_campaign2008_mostpop]


23 '''Citigroup Rescue''' -  US government makes $20 billion cash injection and guarantees against loss on $306 billion of iliquid assets [http://www.nytimes.com/2008/11/24/business/24citibank.html?_r=1&scp=2&sq=Citigroup%20rescue&st=cse] [http://www.ustreas.gov/press/releases/hp1287.htm] [http://www.ustreas.gov/press/releases/reports/cititermsheet_112308.pdf][http://online.wsj.com/article/SB122747680752551447.html?mod=special_page_campaign2008_mostpop]
: The 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 [http://www.economist.com/finance/displaystory.cfm?story_id=12689745].


: 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 [http://www.economist.com/finance/displaystory.cfm?story_id=12689745].
:''(for later events see the [[Recession of 2009/Timelines|recession of 2009 timeline]])''
 
 
 
:''(for later events see the recession of 2009 timeline [http://en.citizendium.org/wiki/Recession_of_2009/Timelines])''

Latest revision as of 01:59, 27 October 2013

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A timeline (or several) relating to Crash of 2008.

See also the subprime mortgage timeline, the bank failures and rescues timelineand the recession of 2009 timeline

Deregulation and pre-Crash crisis (1980 - 2000)

  • The 1987 stock market crash [7].
  • There are banking crises in Switzerland, United Kingdom, Norway, Sweden, Japan and the United States [8].
  • The Long Term Capital Management hedge fund fails and is rescued[10] (1998)
  • The "Dot.com" crash (2000)

Prelude to the Crash (2001 - June 2007)

  • The annual issue of US mortgage-backed bonds increases from ~ $500 billion to over $2,000 billion [11]
  • 2001 to Q3 2006 A US housing boom in which the average price rises by 80% [12] .
  • : The Federal Reserve makes a series of discount rate increases (increasing the federal funds rate from 1 per cent in 2003 to 5.25 per cent in 2006)[13].
  • Q3 2006 to Q2 2007 US house prices fall to 8% below 2006 peak ()[14].
  • US mortgage foreclosures surge [15] [16].
  • The values of bank assets suffer large reductions (including the assets of the Bank of America and Citigroup banks in the US, the Barclays and HSBC banks in the UK, the BNP Paribas bank in France, and Credit Suisse bank in Switzerland.

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The Crash stage 1 (June - July 2007)

2007

June

  • Standard and Poor’s and Moody’s Investor Services downgrade over 100 bonds backed by subprime mortgages.

July

  • 11 Standard and Poor’s places 612 securities backed by subprime residential mortgages on a credit watch.

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The Crash stage 2 (August 2007 - September 2008)

2007

August

    The French BNP Paribas bank freezes several of its funds because it is unable to value their bonds that are backed by US house mortgages. [21]

    The interbank market suffers a virtual collapse [22].

  • 15 The US major mortgage lender Countrywide announces a large increase in subprime mortgage defaults.
  • 31 The US National Association of Realtors announces an 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 bank run [23]

December

  • 12 The Federal Reserve Board announces the creation of a Term Auction Facility (TAF) in which fixed amounts of term funds will be auctioned to depository institutions against a wide variety of collateral. The bank authorizes temporary reciprocal currency arrangements (swap lines) with the European Central Bank and the Swiss National Bank . The Federal Reserve states that it will provide up to $20 billion and $4 billion to the European Central Bank and the Swiss National Bank, respectively, for up to 6 months [24].

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2008

January

  • US mortgage lender Countrywide sold to Bank of America after its share price drops by 48% [25].

February

  • The Northern Rock bank is "nationalised [26].

March

  • The Bear Stearns investment bank is rescued [27] - the JP Morgan Chase bank agrees to buy Bear Stearns for $10 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. {GT258}

April

  • Bank of England announces its Special Liquidity Scheme to allow banks to swap some of their illiquid assets for liquid Treasury Bills for up to three years [29].

June

  • US house prices fall to 20% below their 2006 peak [30].

July

  • The crude oil price peaks at $145 per barrel (compared with $70 in July 2007)[31]

August

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The Crash stage 3 (September - December 2008)

2008

September

Negotiations with possible private sector rescuers fail [37]
  • 16 $785m worth of Lehman Brother's funds are written off and money market investors suffer a massive loss [38].
panic in the money market and the virtual collapse of the interbank market
  • 17 The American Insurance Group is "nationalised" [39].
  • UK's Halifax/Bank of Scotland bank is rescued from bankruptcy by a bid from Lloyds TSB [40].
  • 18 Paulson Rescue plan proposed (US Treasury scheme to take "toxic assets" out of the US banking system) [41]
  • 23 The Federal Reserve Board announces a scheme to protect the Goldman Sachs and Morgan Stanley investment banks from failure [44].
  • 26 The Washington Mutual bank is closed and its assets are sold to the JP Morgan Chase bank [45].
  • Coordinated support is provided to their banks by US, UK, European and Swiss central banks [46].
  • 28 The UK Bradford and Bingley is "nationalised" [47].
Multiple European bank rescues [48].

/industry_sectors/banking_and_finance/article4849302.ece].

The Irish government announces that it will guarantee all deposits in Irish banks - assuming a liability of €440 billion: more than twice Ireland’s gross domestic product[49].

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October 1-7

  • 3 The (modified) $700 billion Paulson Plan (to purchase toxic assets) approved by Congress [50].
The Dutch Fortis and ABN Amro banks are "nationalised" [51].
The German Hypo Real Estate bank is rescued [52]
Iceland suffers an economic crisis [53].
  • 6 The US Wachovia Corporation is to be rescued by a takeover by the Wells Fargo bank [54].
  • 7 More European bank rescues [55].
UK credit insurer withdraws cover [56].

Systemic rescue

October

  • 8 UK Chancellor of the Exchequer announces unlimited support to all UK banks. His £500 billion bank rescue plan undertakes to inject capital or take equity in banks and to guarantee interbank lending, as required [57] [58].
  • 11 US President Bush announces a similar bank rescue plan [59].
  • 12 European Union leaders agree to adopt similar bank rescue plan [60].
  • 19 A German bank rescue plan is agreed [61].
  • 21 The US Federal Reserve Bank offers $540 billion loan support to money market mutual funds [62].

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November

  • 12 A US government plan to purchase "toxic assets" is abandoned [64] [65]
  • 23 The US Citigroup bank is rescued (the US government makes $20 billion cash injection and guarantees against loss on $306 billion of illiquid assets [66] [67] [68][69]
The 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 [70].
(for later events see the recession of 2009 timeline)