Timeline of The Crash


How the crash unfolded: its backstory, events and major players.

2002 - 2004

Billions of $ loaned to people on low incomes in the US. Federal Reserve starts to raise interest rates from June 2004, many fall into arrears.

Data source: Guardian, 26th March, 2008
2006

US home prices peak-deregulation

Data source: Christian Science Monitor, Sep 8, 2013
April 2, 2007

New Century Financial Corp, a subprime lender files for bankruptcy.

Data source: Reuters Business news, Jonathan Stempel
July-August, 2007

UK Stock market volatililty. Banks stop lending to each other, credit crunch begins.

Data source: Telegraph, 4 June, 2017
The day the world changed

Adam Applegarth – Northern Rock’s chief executive August 9, 2007

August 7, 2007

US stock market volatility.

Data source: Bloomberg
August 9, 2007

Investment bank BNP Paribas tells investors they will not be able to take money out of two of its funds because it cannot value the assets in them, owing to a "complete evaporation of liquidity" in the market. It is the clearest sign yet that banks are refusing to do business with each other.

The European Central Bank (ECB) has pumped €95bn (£63bn) into the eurozone banking market to allay fears about a sub-prime credit crunch

Data source: BBC
August 29, 2007

FSA chairman Sir Callum McCarthey writes to chancellor Alistair Darling that Northern Rock “was running into quite substantial problems.”

Data source: Guardian, 15 September, 2007
September 14, 2007

Northern Rock seeks emergency funding from Bank of England – run on the bank.

Data source: Telegraph, 4 June, 2017

Who was involved?

Nobody could see the squeeze on global liquidity. Nobody could claim they saw it coming
Adam Applegarth September 15, 2007
September 15, 2007

Customers of Northern Rock rush to Branches to empty their accounts.

October 9, 2007

Stock Market all time high – Dow 14,164.

Data source: CNBC
December 12, 2007

The Federal Reserve - Term Auction Facility to lend to ailing financial institutions.

Data source: Reuters, global markets
January 8, 2008

Fed reduces short-term interest rates for the 5th time in 4 months to 3%.
Bear Stearns CEO James Cayne resigns.

Data source: Toronto Star

Who was involved?

January, 2008

Northern Rock CEO – Adam Applegarth announces resignation.

Data source: Guardian, March 26, 2008
January 21, 2008

UK Bailouts Begin

Treasury announces plans to back a private-sector rescue of the Rock through the sale of government bonds to pay off the lender’s £24bn debts.

Data source: Guardian, 26th, March,
January 26, 2008

The FSA is criticised for “systematic failure of duty” by the Treasury select committee. MPs recommend new protection for depositors, and new powers to allow authorities to spot and tackle banks at risk.

Data source: Guardian, 26th, March,
January 30, 2008

Fed Reduces short term rate to 2%.

Data source: CS Monitor
The house cost $312,000 and we borrowed the whole amount. Then in 2008 my husband lost his job. It became hard to keep up with the mortgage payments
Sandra Michel, a nurse, who nearly lost her home in 2008. August 7, 2012
February 17, 2008

The government announces that struggling Northern Rock temporarily nationalised.

Data source: BBC
March 10, 2008

Bush bailout package - $700m.

Data source: NBC News
March 12, 2008

Bank of England agrees to pump at least £10bn into long-term money markets.

Data source: Daily Mail
March 17, 2008

Bear Sterns Collapses - Bought out by JP Morgan.

Data source: Monitor (ibid)
March 26, 2008

The FSA Authority admits there was a lack of sufficient supervision over Northern Rock.

Data source: Guardian, March 26, 2008
April 21, 2008

Govt unveils £50bn plan to part-nationalise major UK banks.

Data source: Guardian
September 7, 2008

Federal Govt takes over Fannie Mae and Freddie Mac.
FED bails out insurance AIG.

Data source: CNN Money
September 14, 2008

Lehman Brothers files the largest bankruptcy case in US history.

Data source: New York Times
I am very angry that we can have a situation where a bank can be forced into a merger by basically a bunch of short-selling spivs and speculators in the financial markets. All financial regulators have got to wake up to where we are at the present moment
Alex Salmond, Leader of the SNP September 17, 2008
September 17, 2008

Lloyds TSB announces deal to take over HBOS (Britain’s biggest mortgage lender).

Data source: Guardian
September 19, 2008

Govt. takes control of Bradford and Bingley’s £50bn of mortgages and loans.

Data source: Marketing Week
At about 6:30pm, we were told there would be a meeting of court. Instead of coming to the bank, where we would be photographed coming in the door, we were all to meet outside the McDonald’s in Liverpool St, where we would be picked up...with darkened windows and driven through the back of the Bank
A member of the court of the Bank of England, who asked not to be named September 24, 2008
Data source: Daily Telegraph
Your company is now bankrupt, our economy is in crisis, but you get to keep $480 million (£276 million). I have a very basic question for you, is this fair?

Question to Richard Fuld of Lehman Brothers October 7, 2008

Who was involved?

October 8, 2008

Iceland teeters on the brink of national bankruptcy

Data source: Associated Press
October 8, 2008

Bank of England extends the existing £50bn special liquidity scheme to £200bn, while a further £250bn to debt guarantee scheme.

Data source: BBC
October 14, 2008

US Treasury – TARP money, $125 million to 9 Banks.

Data source: Mondac
October 27, 2008

Dow – lowers 18% in one week.

Data source: CNN
October 29, 2008

FED short-term rate – down to 1%.

Data source: Federal Reserve
November 12, 2008

Hank Paulson announces changes to TARP – cancels the acquisition of toxic assets, decides on injection of cash.

Data source: Guardian, Aug 7, 2012

Who was involved?

November 25, 2008

FED – Term Asset-Backed Securities Lending Facility to support owners of securities backed by credit card, student loans, auto loans, and small business loans.

Data source: Federal Reserve
It was totally clear nobody knew what they were doing. Hank Paulson would change his plans and his public statements on approximately on a daily basis. It is also became clear that they were not going to punish people or change the nature of the system.
Charles Ferguson, director, Inside Job, Oscar-winning documentary about the banking crisis November 12, 2008
October 8, 2008

Bank of England cuts interest rates by 0.5% to 4.5%.

Data source: BBC
RBS, HBOS and Lloyds were experiencing a professional bank run, where the markets were no longer willing to fund the UK banks. That’s why we stepped in. We will never appreciate how close we came to a collapse of the banking system
Paul Myners, City Minister, 2008-2010 October 13, 2008
October 13, 2008

Govt £37bn rescue package for RBS, Lloyds TSB and HBOs.

Data source: BBC
October 18, 2008

Chancellor Alistair Darling – plans to fund public projects.

Data source: Telegraph
We not only saved the world...
Gordon Brown, PMQs December 10, 2008
December 16, 2008

FED – short term rate is 0.

Data source: Monitor
December 19, 2008

Bailout of GM, Chrysler, $13.4 from the TARP fund – Troubled Asset Relief Program – bought insured toxic sub-prime mortgage securities from the major banks.

Data source: Monitor
January 16, 2009

The Crash Bites

Bailouts – Bank of America ($20bn), $100bn guarantees.

Data source: Monitor
January 23, 2009

Britain’s factories slash output at the fastest rate since the 3-day week of the 1970s

Data source: Guardian, October 23, 2009
February 17, 2009

Obama, $787 billion stimulus package, tax cuts, money for infrastructure, schools, healthcare, and green energy.

Data source: US News
March 5, 2009

Bank of England, cut UK interest rates to historic low of 0.5%, and pledged to increase money-supply

Data source: Guardian, October 23, 2009
April 2, 2009

The G20 agrees on a global stimulus package worth $5tn.

May 5, 2009

Unemployment hit 2.2 million, biggest surge since 81

Data source: Business Insider
June 2, 2009

GM files for bankruptcy.

Data source: Money CNN
June 9, 2009

Recession in US officially ends.

Data source: Reuters
July 23, 2009

Institute for Fiscal Studies predicts “a decade of pain”.

Data source: Guardian
August 27, 2009

Insolvencies hit record high, unemployment rising to 2.435 million.
Adair Turner, the chairman of the Financial Services Authority calls some banking activity “Socially useless”.
Mervn King blames banks for dragging the world into “A deep recession”

Data source: Guardian, August 7 & October 23, 2009
November 6, 2009

US unemployment rate at 10%.

July 21, 2010

Obama – reform of the financial system – Dodd-Frank Wall Street Reform and Consumer Protection Act.

Data source: White House press service
I don’t believe that risks (of deflation) could materialise. On the contrary, inflation expectations are remarkably well anchored in line with our definition – less than 2%, close to 2% – and have remained so during the recent crisis. I firmly believe that in the current circumstances confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today
Jean-Claude Trichet President of ECB June 16, 2010
December 28, 2010

Home foreclosures hit 2.9 million.

March 12, 2012

Denial of Anger

Mervyn King says that banks are in denial about the "very real and wholly understandable" anger that is felt at their behaviour.

Data source: The Times
August 2, 2012

Dow hits new high – 15,658.

Data source: Monitor (ibid)
September, 2012

Unemployment falls below 8%, the lowest point since Jan. 2009.

The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank's board from its birth to its death
Banking standards Commission April 5, 2013

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