- Feb. 27: Mortgage giant Freddie Mac says it will no longer buy the riskiest subprime loans.
- April 2: Subprime mortgage lender New Century Financial files for bankruptcy-court protection.
- June 2007: Two Bear Stearns hedge funds suffer after bad bets on U.S. subprime mortgage-related securities.
- July 31: Investment bank Bear Stearns liquidates two hedge funds that invested in risky securities backed by subprime mortgage loans.
- Aug. 6: American Home Mortgage Investment, which specializes in adjustable-rate mortgages, files for bankruptcy protection.
- Aug. 16: Fitch Ratings cuts the credit rating of giant mortgage lender Countrywide Financial to its third-lowest investment-grade rating
- July-Sept: German bank IKB becomes first in Europe to be hit by bad investments in U.S. subprime market; SachsenLB bailed out in September, also due to subprime exposure
- Sept 14: First run on a major UK bank in over a century as customers besiege mortgage bank Northern Rock.
- Oct 15: Citigroup posts surprise 57 percent drop in Q3 profit, hurt by $6.5 billion subprime-related write-downs and losses. CEO resigns November 4
- Dec 17: Credit crunch spreads to Australia’s Centro Properties, a U.S. shopping mall owner, which issues a profit warning. Its shares dropped 70%
- Jan 11: Bank of America, the biggest U.S. bank by market value, agrees to buy Countrywide Financial for about $4 billion.
- Jan 30: UBS announces $4 billion new write-downs, taking total subprime-related writedowns to $18.4 billion.
- Feb 17: Northern Rock nationalized after funding crisis.
- Feb 28: Germany’s DZ Bank joins growing list of subprime casualties, posting 1.36 billion euros in write-downs.
- Mar 16: The Federal Reserve agrees to guarantee $30 billion of Bear Stearns’ assets in connection with the government-sponsored sale of the investment bank to JPMorgan Chase for about $2 a share.
- Apr 29: Deutsche Bank reports a first pretax loss in five years after writing down $4.2 billion in bad loans and mortgage-backed securities.
- July 11: Federal regulators seize IndyMac Federal Bank after it becomes the largest regulated thrift to fail after depositors withdraw more than $1.3 billion over 11 days.
- July 13: U.S. Treasury and Federal Reserve effectively nationalize mortgage finance companies Fannie Mae and Freddie Mac in a bid to support U.S. housing market.
- July 31: Deutsche Bank announces another $3.6 billion writedowns, taking its bill from the financial crisis beyond $11 billion and putting it among the top 10 global casualties.
- SEPT 7: Mortgage giants Fannie Mae and Freddie Mac are taken over by the government.
- Sept 15: Lehman Brothers files for bankruptcy-court protection.
Bank of America agrees to purchase Merrill Lynch for $50 billion.
AIG (American International Group), the world’s largest insurer, accepts an $85 billion federal bailout that gives the government a 79.9% stake in the company.
- Sept 16: Central banks pump billions of dollars into money markets in a bid to ease tensions and prevent global financial system from freezing: AIG shares almost halve. Fed announces plan for $85 billion AIG rescue loan in return for 80 percent stake; Britain’s Barclays buys parts of Lehman’s North American assets for $1.75 billion.
- Sept 17: U.S. Securities and Exchange Commission (SEC) curbs short-selling
Shares in Goldman Sachs and Morgan Stanley fall sharply
Britain’s Lloyds TSB buys rival HBOS.
Federal Reserve Lends $85B to AIG
- Sept 19: Treasury Makes Public TARP Proposal
World stock markets rise with TARP proposal to buy up toxic assets.
Treasury Announces Money Market Guarantee Program Protects the shares of all money market fund investors
- Sept 20-21: Details emerge of U.S. plan for $700 billion bailout for firms burdened by bad mortgage debt; Goldman Sachs, Morgan Stanley transformed into bank holding companies, ending Wall Street’s investment banking model.
- Sept 21: Goldman Sachs and Morgan Stanley, the last two independent investment banks, become bank holding companies subject to greater regulation by the Federal Reserve and entitles them to TARP funds.
- Sept 22: Japan’s Nomura Holdings buys Lehman’s Asia operations for up to $525 million. Later, Nomura buys Lehman’s Europe and Middle East operations; Mitsubishi UFJ Financial agrees to buy up to 20 percent of Morgan Stanley.
- Sept 23: Warren Buffett pays $5 billion for up to 9 percent of Goldman Sachs; FBI probes Fannie, Freddie, AIG and Lehman for potential mortgage fraud, according to CNN. (Compiled by Asiadesk and Gillian Murdoch, Beijing Editorial Reference Unit; Editing by Ian Geoghegan)
- Sept 25: Federal regulators close Washington Mutual Bank and its branches and assets are sold to JPMorgan Chase in the biggest U.S. bank failure in history.
- Sept 29: Congress rejects TARP a $700 billion Wall Street financial rescue package Defeated in House (228–225), sending the Dow Jones industrial average down 778 points, its single-worst point drop ever.
Fed Massive Liquidity Actions – $850B & An increase in swap authorization limits among central banks.
FDIC Approves Sale of Wachovia to Citigroup
- Oct 1: Senate Passes revised version of TARP (74–25)
- Oct 3: Congress passes a revised version of TARP and President Bush signs it.
Wells Fargo & Co. agrees to buy Wachovia for about $14.8 billion.
- Oct 6: Fed to Pay Interest on Bank Reserves known as Excess Reserves.
- Oct 7: Fed Announces Creation of Commercial Paper Funding Facility (CMPFF)
FDIC announces an increase in deposit insurance coverage to $250,000 per depositor
- Oct 8: Coordinated Central Bank Rate Cuts of 50bps (Fed, BOE, SNB, ECB)
UK Government Announces Intentions for Direct Equity Purchases/Bank Loan Guarantees
Fed Authorizes Additional $37B of Lending to AIG
- Oct 10: G7 Releases Plan of Action (but takes no actual action)
- Oct 12: Fed Approves Sale of Wachovia to Wells Fargo with no Government assistance
- Oct 13: Fed Expands Currency Swap Lines with European Nations and Japan to Unlimited Amounts
UK Government Formally Announce Equity Purchases from RBS and HBOS/Lloyd’s
- Oct 14: Treasury, Fed, FDIC Announce Actions to Inject Capital into US Banks by Preferred Equity/Warrant Purchases of 9 large banks totaling $125B
Oct 20: New Record high in Federal Reserve Board Reserves $441B
- Nov 10: AIG borrowing hits $150 billion
American Express/American Express Travel Related Services to become Bank Holding Companies
- Nov 18: Ford, General Motors and Chrysler executives testify before Congress, requesting federal loans from TARP.
Nov 23: The Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. agree to rescue Citigroup with a package of guarantees, funding access and capital. Citigroup will issue preferred shares to the Treasury and FDIC in exchange for protection against losses on a $306 billion pool of commercial and residential securities it holds.
- Nov 26: Bank of America receives approval from Federal Reserve to acquire Merrill Lynch
- Nov 27: Fed begins Commercial Paper Facility
- Dec 15: PNC Financial Services to acquire National City Corporation
- Dec 19: Treasury authorizes loans of up to $13.4 billion for General Motors and $4.0 billion for Chrysler from TARP
- Jan 12: FDIC sends letter requesting that they document their use of Capital Purchase Program money
- Jan 29: House Passes $819 Billion Economic Stimulus Package (244–188)
- Feb 4: Treasury Releases Executive Compensation Guidelines; Exempts CPP Participants
- Feb 10: Senate Passes $848 Billion Economic Stimulus Bill (61–37)
Treasury Secretary Geithner Announces Financial Stability Plan
- Feb 11: Chief Executives from Wells Fargo & Co., Citigroup, Morgan Stanley, State Street Corporation, Bank of America, Bank of New York Mellon, JP Morgan Chase & Co. and Goldman Sachs Group appear before Congress
- Feb 13: Congress Passes $787 Billion Economic Stimulus Bill (House: 246–183; Senate: 60–38)
- Feb 15: Banks participating in Treasury’s Capital Purchase Plan pay first dividend to Treasury totaling $2.4 billion
- Feb 16: President Obama Signs $787 Billion Economic Stimulus Bill
- (1) $300 billion in tax breaks for individuals and businesses
(2) $200 billion to modernize and improve the nation’s infrastructure
(3) More than $250 billion in direct aid to distressed states and individuals
- (1) $300 billion in tax breaks for individuals and businesses
- Feb 18: President Obama Announces Homeowner Affordability and Stability Plan ($75 Billion)
- Feb 23: Treasury, FDIC, OCC, OTS, and FRB issue a joint statement that the government stands firmly behind the banking system, and it will ensure that banks have the capital and liquidity they need to provide the credit necessary to restore economic growth.
- Feb 25: Treasury Announces Terms of Capital Assistance Program (CAP) that includes “stress tests” (to be completed by end of April)
- Feb 26: President Obama Unveils $3.6tn Budget and Forecasts Budget Deficit of $1.75tn
FDIC 4Q Report shows “problem banks” increased from 171 to 252.
Fannie Mae Reports a Loss of $58.7 billion for 2008.
- Feb 27: FDIC raised fees by 20 basis points
- Mar 2: AIG reports loss of $99.3 billion for all of 2008
Treasury and FRB Announce Participation in AIG Restructuring Plan
(1) AIG will receive as much as $30 billion of additional capital from TARP
(2) Treasury swap $40 billion cumulative preferred shares for new preferred shares with revised terms that more closely resemble common equity
(3) AIG’s revolving credit facility with the Fed of NY to be reduced from $60 to $25 billion with modified terms.
- Mar 3: Treasury and Fed Announce Launch of Term Asset-Backed Securities Loan Facility (TALF)
Freddie Mac CEO, David Moffett, Resigns Effective March 13
- Mar 4: Treasury creates guidelines to modify eligible mortgages under the Homeowner Affordability and Stability Plan
- Mar 5: FDIC Pledges to Cut Emergency Assessment in Half if Congress Expands Credit Line
- Mar 6: Chris Dodd introduces the Depositor Protection Act of 2009 increasing the FDIC’s line of credit from $30 to $100 billion US Dow Jones Industrial reaches final low in a classic V-Bottom formation
- Mar 11: Freddie Mac reports net loss of $50.1 billion for 2008.
- Mar 19: Treasury Auto Supplier Support Program providing up to $5 billion in financing to the automotive industry.
- Mar 23: Treasury gives details on the Public-Private Investment Program for Legacy Assets.
- Mar 25: Treasury proposes legislation for seizing financial institutions under conservatorship or receivership
- Mar 26: Treasury outlines comprehensive regulatory reform creating a single independent regulator
- Mar 31: Treasury extends Money Market Funds Guarantee Program through Sep 18, 2009
Four banks redeem shares held by Treasury (Bank of Marin Bancorp, Iberiabank Corporation, Old National Bancorp, Signature Bank)
- Apr 1: Fed Chairman Bernanke testifies explaining Term Asset-Backed Loan Facility (TALF)
- Apr 2: Financial Accounting Standards Board (FASB) approves new guidance to ease the accounting of troubled assets held by banks and other financial companies.
- Apr 6: Fed announces new currency agreements (swap lines) among central banks
- Apr 24: Fed publishes a white paper describing “stress test” of large US bank holding companies
- Apr 30: Senate Defeats the Bankruptcy Cram-Down Amendment (S. 896) to allow bankruptcy judges authority to unilaterally modify the terms of mortgages.
House passes H.R. 627, the Credit Cardholders Bill of Rights.
- May 1: Fed announces commercial mortgagebacked securities (CMBS) and securities backed by insurance premium finance loans are eligible collateral under TALF extending term to 5 years from 3 years
- May 6: Treasury and the FHFA agree to increase the Treasury’s funding commitment to Fannie Mae to $200 billion from $100 billion allowing size of Fannie Mae’s portfolio to $900 billion & debt to increase to $1,080 billion.
- May 7: Fed releases results of stress-test for 19 major banks 10 banks must increase capital.
- May 8: Fannie Mae reports a loss of $23.2 billion for the first quarter of 2009
- May 12: Freddie Mac reports a first quarter 2009 loss of $9.9 billion
- May 13: Treasury proposes amendments to the Commodity Exchange Act and securities laws to enhance government regulation of over-the-counter (OTC) derivatives markets.
- May 19: House passes S. 896 increasing the FDIC’s borrowing authority to $100 billion.
Fed announces that some high-quality commercial mortgage-backed securities issued before 2009 will become eligible collateral under TALF
- May 20: President Obama signs the Helping Families Save Their Homes Act of 2009.
- May 21: FDIC announces the approval of GMAC to be covered up to $7.4 billion
S&P lowers UK government debt from stable to negative
- May 22: FDIC special assessment of five basis points on each FDIC insured institution
Fed announces final rule that will allow bank holding companies to include TARP funds as capital
- May 27: FDIC announces “problem banks” increased from 252 to 305 institutions with $220 billion of assets at the end of the first quarter
21 bank failures take place in 1st-Q 2009, highest since 1992
- Jun 1: General Motors (GM) files for relief under Chapter 11 of the US Bankruptcy Code.
Fed announces the criteria to evaluate redemption for troubled banks
- Jun 3: FDIC announces planned sale of impaired bank assets will be postponed
- Jun 9: 10 US banks participating in CPP met the requirements for repayment
- Jun 12: Fed announces it wilol review regulatory capital requirements
- Jun 17: Treasury calls for reforming regulatory system proposing the creation of a Financial Services Oversight Council & new authority for the Fed to supervise all firms that pose a threat to financial stability, including firms that do not own a bank.
- Jun 24: SEC proposes rule amendments for money markets & Fed announces modifications to its liquidity programs.
- Jun 25: AIG agrees with Fed to reduce the debt AIG owes by $25 billion.
- Jun 30: Treasury proposes to create a new Consumer Financial Protection Agency consolidating similar departments in the Fed, Comptroller of the Currency, Office of Thrift Supervision, FDIC, FTC, and the National Credit Union Administration
Treasury proposes amendments to the Federal Trade Commission Act to coordinate with new Consumer Financial Protection
- Jul 8: Treasury, Federal Reserve and the FDIC announce new Legacy Securities Public-Private Investment Program (PPIP) investing up to $30 billion with private sector fund managers
- Jul 21: Bernanke presents Monetary Policy Report to the Congress and testifies that risk aversion has subsided
- Jul 23: Fed proposes changes to Regulation Z (Truth in Lending) intended to improve the disclosures in connection with closed-end mortgages and home-equity lines of credit.