Crash of 2008/Timelines: Difference between revisions

From Citizendium
Jump to navigation Jump to search
imported>Nick Gardner
imported>Nick Gardner
Line 88: Line 88:


====April====
====April====
* The [[International Monetary  Fund]] estimates that the global  crisis costs could reach $1 trillion  [http://www.iht.com/articles/2008/04/08/business/imf.php].
* 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].


* 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].
* 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].

Revision as of 04:56, 12 March 2010

This article is developed but not approved.
Main Article
Discussion
Related Articles  [?]
Bibliography  [?]
External Links  [?]
Citable Version  [?]
Timelines [?]
Tutorials [?]
Addendum [?]
 
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


The 1980s

  • The 1987 stock market crash [6].

The 1990s

The decade

  • There are banking crises in Switzerland, United Kingdom, Norway, Sweden, Japan and the US [7].
  • A further 451 US "Savings and Loans" mortgage lenders fail.
  • The cost to US taxpayers of the rescue of the Savings and Loans house mortgage lenders reaches $129 billion [10].

2000-2006

  • The "Dot.com" crash (2000)
  • The annual issue of US mortgage-backed bonds increases from ~ $500 billion to over $2,000 billion [11]
  • A US housing boom in which the average price rises by 80% [12] .
  • US mortgage foreclosures surge [13].

2007 before the crash

  • US house prices fall to 8% below 2006 peak [14].
  • There are further increases in US house mortgage defaults and foreclosures [15].
  • 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.

The Crash

2007

June

  • 21 Bank of England Chairman Mervyn King warns on the risks of credit derivatives.

August

    The French BNP Paribas bank freezes several of its funds because it is unable to value their bonds that are backed by UH house mortgages. [19]

    The interbank market suffers a virtual collapse [20].

  • 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 [21]

2008

January

  • US mortgage lender Countrywide sold to Bank of America after its share price drops by 48% [22].

February

  • The Northern Rock bank is "nationalised [23].

March

  • The Bear Stearns investment bank is rescued [24] - 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 [26].

June

  • US house prices fall to 20% below their 2006 peak [27].

August

September

Negotiations with possible private sector rescuers fail [31]
  • 16 $785m worth of Lehman Brother's" funds are written off and money market investors suffer a massive loss [32].
panic in the money market and the virtual collapse of the interbank market
  • 17 The American Insurance Group is "nationalised" [33].
  • UK's Halifax/Bank of Scotland bank is rescued from bankruptcy by a bid from Lloyds TSB [34].
  • 18 Paulson Rescue plan proposed (US Treasury scheme to take "toxic assets" out of the US banking system) [35]
  • 23 The Federal Reserve Board announces a scheme to protect the Goldman Sachs and Morgan Stanley investment banks from failure [38].
  • 26 The Washington Mutual bank is closed and its assets are sold to the JP Morgan Chase bank [39].
  • Coordinated support is provided to their banks by US, UK, European and Swiss central banks [40].
  • 28 The UK Bradford and Bingley is "nationalised" [41].
  • Multiple European bank rescues [42].
  • 30 Iceland's Glitnir bank is "nationalised" [43].

October

  • 3 The (modified) $700 billion Paulson Plan (to purchase toxic assets) approved by Congress [44].
The Dutch Fortis and ABN Amro banks are "nationalised" [45].
The German Hypo Real Estate bank is rescued [46]
Iceland suffers an economic crisis [47].
  • 6 The US Wachovia Corporation is to be rescued by a takeover by the Wells Fargo bank [48].
  • 7 More European bank rescues [49].
UK credit insurer withdraws cover [50].
  • 8 UK Chancellor of the Exchequer Gordon Brown 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 [51] [52].
There is a coordinated discount rate cut of half per cent by the central banks of the United States, Europe, China, Britain, Canada, Sweden and Switzerland [53].
  • 10 A G7 Action Plan is agreed by the finance ministers of the G7 countries(in a broadly worded statement, lacking in specifics) [54].
  • 12 European Union leaders agree to adopt Gordon Brown's bank rescue plan[55].
  • 14 US President Bush announces a bank rescue plan similar to Gordon Brown's, with undertakings to inject capital, take equity in banks and guarantee interbank lending [56].
  • 19 A German bank rescue plan is agreed [57].
  • 21 The US Federal Reserve Bank offers $540 billion loan support to money market mutual funds [58].

November

  • 12 A US government plan to purchase "toxic assets" is abandoned [60] [61]
  • 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 [62] [63] [64][65]
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 [66].


(for later events see the recession of 2009 timeline)