Credit Crunch Timeline

Nursery Rhymes

Credit Crunch Timeline

This Modern History Timeline has been developed to provide a 'snapshot' of events
Financial crisis in the mortgage and loan markets in the United States
Europe sees effect of the credit crunch
Global stock markets report huge falls
A full 2007 / 2008 Credit Crunch Timeline...

The Credit Crunch is a financial crisis which was initially due to a loss of confidence by investors in the mortgage and loan markets in the United States. However due to the close interaction of banking institutions across the world the "credit crunch" resulted in a global liquidity crisis.

The credit crunch can be defined as the sudden reduction in the easy availability of credit or loans from banks or mortgage lenders resulting in far more stringent checks becoming conditional before bank loans will be approved.

Year

Month

2007 / 2008 Credit Crunch Timeline of Events

2007

July

Credit Crunch begins with the subprime mortgage crisis in the United States

2007

August

US Credit Crunch goes Global due to the interaction of world banks and Hedge Funds who also have subprime mortgage backed securities

Aug 9: Debt, due to defaults by subprime mortgage payers, results in the European Central Bank injects 95 billion euros into the European banking market.

Aug 10: The United States Federal Reserve (Fed) injects 43 billion US Dollars

US Housing problem kicks in

2007

September

US Interest rates lowered

British Government take over Northern Rock a major UK bank

Internet bank NetBank goes bankrupt

2007

December

ECB lends European commercial banks $500bn over the Christmas period to help ease the credit crisis

Year

Month

2008 Credit Crunch Timeline of Events

2008

January

Down turn in stock markets

2008

February

House prices continue to fall and jobs are cut

Houses continue to be repossessed

Leaders from the G7 group project worldwide losses from the US mortgage crisis could reach $400bn

2008

March

March 16: Bear Stearns acquired by JPMorgan Chase avoiding bankruptcy

A £1bn hedge fund run by Peloton Partners collapses

2008

April

Germany's Deutsche Bank warns of credit losses

2008

May

Figures show that Retail and construction firms are hardest hit by the Credit Crunch

2008

July

July 11: Indymac Bank is placed into the receivership

Banks report unprecedented losses

2008

August

Washington Mutual, Morgan Stanley and Goldman Sachs come under pressure

2008

September

September 7: Federal takeover of Fannie Mae and Freddie Mac

September 14: Merrill Lynch sold to Bank of America

Lehman Brothers go bankrupt

September 19: Bailout of the U.S. financial system by the Emergency Economic Stabilization Act of 2008 proposed by US Treasury Secretary Henry Paulson

September 23: Announced that the FBI investigating the possibility of fraud in 26 finance companies including Fannie Mae, Freddie Mac, Lehman Brothers and AIG

2008

October

Europe sees effect of the credit crunch resulting in falling house prices, job losses and bankruptcies

The three major banks of Iceland are nationalized

Other European Bankspartially nationalized

Stock Markets fall

Global cuts in interest rates

In the UK Lloyds TSB allowed to start takeover plans of HBOS to avoid another Northern Rock style collapse with promise of support from British government

In UK the guarantee of bank deposits are raised from £35,000 to £50,000

G7 meet but fail to reach agreement

2008

November

The US government agrees to rescue Citigroup

2008

December

1 December: The US recession is officially declared by the National Bureau of Economic Research

29 December: The US Treasury unveils a $6bn bail-out for GMAC (General Motors car loans)

Global stock markets report the biggest annual falls for 24 years

Credit Crunch Timeline

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