The Credit Crisis Timeline

This timeline provides a daily update on who's buying who, collapses within the global financial markets as well as national and international rescue plans.

The information here is based on news sources including the BBC website and the Financial Times.

Iceland’s government collapsed following political turmoil prompted by the global financial crisis.

The Japanese government threw a US$16.7bn lifeline to companies threatened by the global financial crisis, to try to shield the shrinking economy from more job losses and bankruptcies.

ING, the Dutch banking and insurance group, revealed fresh losses in the fourth quarter of €2bn on its structured credit portfolio, prompting it to seek new state guarantees, replace its chief executive and cut 7,000 jobs.

Société Générale and Crédit Agricole are to merge their asset management businesses to form Europe’s fourth largest operator with €638bn under management.

The French government is to provide €5bn in credit guarantees to help Airbus sell aircraft to customers that are struggling to secure finance for their purchases.

The UK is now in recession for the first time since 1991, official government figures have confirmed. Gross domestic product fell by 1.5% in the last three months of 2008 after a 0.6% drop in the previous quarter.

Fortis Bank, the Belgian state-owned lender, will record a net loss of up to €19bn for 2008 due to the financial crisis and the break-up of the banking and insurance group that owned it.

The British pound plunged to its lowest level against the dollar since 1985 amid uncertainty about the government banking support package. Sterling slid another 1.6% against Britain’s main trading partners, taking its losses since 15 January to almost 6%. Against the dollar, the pound closed at US$1.3733, a fall of 11 cents this week.

The Bank of England will start to buy corporate bonds in large quantities within weeks, said Mervyn King, governor of BoE, speaking to employers at a Confederation of British Industry (CBI) dinner in Nottingham.

The French government said that it would earmark up to €6bn for a rescue plan for its car industry.

Spain became the first country to lose its triple A credit rating from Standard & Poor’s since Japan in 2001, spurring a slide in the euro as the economic outlook for Europe worsened.

Denmark will offer up to Dkr100bn (€13.4bn) in loans to recapitalise its struggling banks and encourage them to restart lending as the country’s economy continues its slide into recession.

UBS announced that it would buy the commodity index business of AIG, the US insurer, for US$15m, after it spent the past two months divesting non-core commodities activities.

The UK government has announced a second package of measures to encourage banks to lend to individuals and businesses. The list of measures includes a scheme to offer insurance against banks losing more money from the toxic debt that started the credit crunch, while the Bank of England has been given a new role - it will be able to buy up to £50bn of assets directly from firms. The government is also increasing its stake in RBS to nearly 70% from 58%.

Royal Bank of Scotland (RBS) announced it expects to suffer a loss of up to £28bn last year as a result of the credit crunch.

The US Senate has released the remaining US$350bn of the Troubled Asset Relief Programme (TARP) funds. Bond insurers Ambac Financial Group and MBIA have asked for some of the money arguing that a capital infusion from the government would help revitalise public-debt markets.

Eurozone interest rates fell by half a percentage point to the lowest level (2%) in more than three years as the European Central Bank said it expected the single currency area’s recession to deepen and signalled borrowing costs could fall further.

Citigroup announces plans to split in two, as it reported a quarterly loss of US$8.29bn (£5.6bn). It will realign into two new firms, Citicorp and Citi Holdings. Citicorp will handle the company's traditional banking work, while Citi Holdings will take on the firm's riskiest investment assets.

Bank of America will receive US$20bn (£13.4bn) in fresh US government aid and US$118bn worth of guarantees against bad assets.

The Irish government moves to nationalise Anglo Irish Bank after its funding problems continued.

Royal Bank of Scotland has raised about US$2.4bn by selling its stake in Bank of China.

The UK government has unveiled a plan to guarantee up to £20bn of loans to small businesses to help them survive the economic downturn. In return for a fee, the state will, in effect, insure banks against companies defaulting on loan repayments.

Barclays is cutting about 2,100 jobs worldwide in investment banking and money management in an attempt to slash its costs. The company is cutting 1,300 people from Barclays Capital, the debt-focused investment banking business, 500 from the Barclays Wealth private banking arm, and 330 in Barclays Global Investors, an asset management business. Overall, the cuts amount to 7% of the three divisions’ staff.

German Chancellor Angela Merkel has unveiled an economic stimulus package worth about €50bn to kick-start Europe's largest economy.

The UK Treasury is to own 43.4% of the merged Lloyds HBOS bank, after few shareholders bought new shares. Only 0.24% of the 7.5 billion shares HBOS offered to existing shareholders were taken up, while Lloyds TSB saw only 0.5% of its offered shares purchased.

The sharp slowdown in the US economy will push the federal budget deficit to more than US$1 trillion, the non-partisan Congressional Budget Office (CBO) says.

More US workers lost jobs last year than in any year since World War II, with employers axing 2.6 million posts and 524,000 in December alone. The US jobless rate rose to 7.2% in December, the highest in 16 years.

South Korea's central bank has slashed interest rates by half a percentage point to a record low of 2.5%.

The German government will inject a further €10bn into Commerzbank and take a 25% stake to allow it to complete the takeover of Dresdner Bank from insurance giant Allianz. The capital increase comes two months after the bank received an €8.2bn injection from the government’s financial sector bail-out fund.

The Bank of England has cut interest rates to 1.5%, the lowest level in its 315-year history.

Bank of America is selling a US$2.83bn (13%) chunk of its holding in China Construction Bank at a 12% discount, according to a term sheet obtained by Reuters.

Citigroup’s top executives, including CEO Vikram Pandit and Robert Rubin, a director and senior adviser, will forgo their 2008 bonuses amid internal and external pressure to atone for the company’s huge losses and a US$300bn government bail-out.

Aberdeen Asset Management buys Credit Suisse’s fund arm for up to £250m in shares. The Swiss bank will own 25% of Aberdeen.

UBS has become the first overseas investor to offload its holding in a major Chinese bank as it raised US$835m by selling its 3.4bn shares in the Hong Kong-listed arm of Bank of China.

London’s leading stocks endured their worst annual falls in at least 24 years, while in Europe and Asia, some markets ended the year by notching up their worst performances since records began, according to the Financial Times. The FTSE 100 lost 30.9% in 2008, which was the blue-chip index’s worst annual fall since it was created in 1984. Germany’s Xetra Dax fell 40.3%, its worst annual performance in its 20-year history, and the CAC 40 in Paris was down 42.1%. FTSE Eurofirst 300 suffered an annual decline of 44.7%, its worst year since the index was constituted in 1986. The Nikkei 225 index in Tokyo recorded a 42.1% fall, above its last biggest annual loss of 38.7% in 1990, while Korea’s Kospi index ended the year with a loss of 40.7%. In New York, the S&P 500 has already fallen 41% this year, marking its worst run since a drop of 47.1% in 1931 during the Great Depression.

The Austrian government is preparing to take management control of Vienna-based Bank Medici after the bank revealed clients had lost money in funds it ran which invested with New York financier Bernard Madoff.

The US Treasury department unveiled up to US$6bn in aid for GMAC, the financial services group which is critical to part-owner General Motors‘ turnaround, after the Fed gave GMAC the green light to become bank holding company.

JPMorgan plans to buy two units of UBS, as the Swiss bank continues to trim its investment banking arm. UBS has agreed to sell its Canadian commodities energy business and also its global agricultural business in a deal expected to close in the first quarter of 2009.

The beleaguered US insurance group AIG will sell the Hartford Steam Boiler Company to Munich Re, the German reinsurer, for US$742m.

China cut interest rates for the fifth time in three months as the government tried to pump money into the economy. The benchmark one-year lending rate was cut by 27 basis points to 5.31%, while the one-year deposit rate was lowered by the same amount to 2.25%.

A record number of merger and acquisition deals were cancelled in 2008 leading to a sharp fall in fees for investment bankers. The total volume of worldwide mergers and acquisitions reached US$3.28 trillion in the year to date, down 29% from the full year 2007. Companies abandoned 1,309 transactions valued at a total of US$911bn, according to Dealogic, the financial data provider. In 2007, there were 870 withdrawn deals valued at US$1.16 trillion. BHP Billiton’s US$147.bn bid for Rio Tinto was the largest-ever withdrawn deal, while the US$48.5bn acquisition of Canada’s BCE telecoms group by a consortium of private equity groups marked the biggest failed buy-out ever.

The Irish government unveiled a €5.5bn rescue package for the struggling banking sector that will see taxpayers own up to 75% in Anglo Irish Bank. The government will put €2bn into each of Bank of Ireland and Allied Irish Banks in return for an 8% coupon. The Irish government will also make a €1.5bn investment in Anglo Irish, which suffered the resignations of both its chairman and chief executive last week over loans for directors, but will charge a higher coupon of 10%.

Canada has unveiled a plan to ease pressure on automotive parts suppliers and dealers with C$4bn (€589m) in emergency loans to the local subsidiaries of General Motors and Chrysler.

The US Federal Reserve has slashed interest rates from 1% to virtually zero, saying it would target a record low interest rate of between zero and 0.25%.

The fallout from Bernard Madoff’s alleged US$50bn fraud spread through the global financial system as more banks revealed exposures to his firm. The potential losses reported by large financial institutions that invested or lent to investors in Madoff’s failed venture reached US$10bn after HSBC confirmed the news, first reported in the Financial Times, that it could lose up to US$1bn. The nationalised Dutch arm of Belgian bank Fortis admitted losses could reach €1bn, while Royal Bank of Scotland joined BNP Paribas and Banco Santander among the victims of the scandal, saying it might lose up to £400m. Japan’s Nomura has US$300m at risk. BBVA may lose €300m.

The Irish government is to provide a fund of £9bn to recapitalise all its listed banks. The money will be available to AIB, Anglo-Irish, Irish Nationwide, Irish Life & Permanent and Bank of Ireland, which owns the Bristol & West bank.

The effort to agree legislation to lend US$14bn to the US auto industry has collapsedin the Senate, leading the Bush administration to hold open the possibility that it would seek funds from its financial rescue plan instead.

The Japanese government has doubled the size of its stimulus plan, increasing it by 23 trillion yen (£171bn).

US House of Representatives approved a US$14bn emergency loan for Detroit carmakers by 237 votes to 170, but the bill faces opposition in the Senate.

The Bank of Korea cut its benchmark interest rate by 1 percentage point to 3%, the lowest since the bank began to set a policy rate in 1999.

The Bank of Canada has cut its benchmark interest rate by three-quarters of a percentage point to 1.5%, the lowest rate since 1958.

Volkswagen has become the first German carmaker to seek to tap the country’s €500bn government-backed banking rescue plan. Europe’s largest carmaker said its affiliates, Volkswagen Bank and Volkswagen Financial Services, had applied for state guarantees that would cover loans for refinancing.

The top executives at Merrill Lynch and Morgan Stanley, led by their chief executives, John Thain and John Mack, said they will not receive bonuses this year amid growing pressure on Wall Street leaders to share the pain of the financial crisis. Morgan Stanley also became the first large US bank to announce that employees would be forced to pay back some of their bonuses if they caused significant losses, or reputational harm, to the company.

Sony announces it will close five or six factories and cut 8,000 jobs worldwide in an effort to remain profitable through a slump in consumer spending on electronics.

India announced an extra $4bn economic stimulus package, which brings the amount in new government spending to help the export, real estate and infrastructure sectors to $60bn.

The European Central Bank announced a three-quarters of a percentage point cut in its main policy interest rate to 2.5% - its largest cut ever - just hours after Sweden’s central bank reduced the country’s official borrowing costs by a record 175 basis points.

French president Nicolas Sarkozy unveiled a €26bn package to stimulate the country’s faltering economy. Measures include support for construction and small businesses.

The Bank of England has cut interest rates from 3% to 2% - the lowest level since 1951.

Latvia has nationalised Parex Bank. The government is set to increase its stake in the country’s second largest bank to 84% in order to reassure depositors, creditors and the International Monetary Fund.

The Reserve Bank of New Zealand cut its benchmark interest rate by a record 150 basis points to 5%.

Canada's big five banks - Royal Bank of Canada, Toronto-Dominion, Scotiabank, Canadian Imperial Bank of Commerce and Bank of Montreal – have indicated they will announce writedowns. Bank of Montreal, which reported last Tuesday, tripled fourth-quarter loan loss provisions to US$376m. Scotiabank has disclosed that it will take a pre-tax charge of US$714m. TorontoDominion has announced US$281m in after-tax losses on corporate debt securities and related credit default swaps.

Sweden’s government has considered allocating about US$248m to Saab and Volvo in direct aid or loan guarantees, as GM and Ford anticipates selling these entities.

Royal Bank of Scotland promises to give at least six months’ respite to homeowners who fall behind with mortgage payments.

London Scottish Bank has gone into administration after the Financial Services Authority (FSA) stepped in to stop it accepting deposits. The FSA acted because the Manchester-based firm did not have the amount of cash it needed to continue operating.

Lehman Brothers’ liquidators have exposed the book value of Lehman’s property exposure in Asia: in Thailand, the exposure is US$1bn, while the bank’s Hong Kong units have US$1bn exposure with about 100 loans or direct real estate investments across the region. The subsidiaries also made inter-company transfers worth US$5bn to the bank’s Japanese arm, which were invested in domestic property assets, while one Asian investment vehicle invested US$500m in Taiwan’s high-speed rail project

In the UK, Woolworths and MFI, the kitchen retailer, went into administration marking the worst day so far for retail in the financial crisis. There is a chance, however, that a portion of the Woolworths chain might be saved in some way after Deloitte, the administrator, confirmed that it had hired Hilco to manage the retail business.

The European Commission unveils an economic recovery plan worth €200bn, which it hopes will save millions of European jobs. The scheme aims to stimulate spending and boost consumer confidence.

The US government agrees a bailout of Citi by guaranteeing up to US$306bn in problematic assets and injecting US$20bn in capital to restore confidence in the bank. At the same time, the US Federal Reserve escalated its efforts to revive the financial system, pledging US$800bn to bolster markets for loans to homebuyers, consumers, students and small businesses.

In his Pre-budget Report, Chancellor Alistair Darling unveiled a £20bn fiscal stimulus. UK taxpayers will pay for the consequences of recession, facing six years of austerity. Those earning more than £100,000 will pay more income tax - with those on £150,000 facing a new higher tax rate of 45% - and public spending faces its biggest squeeze for 15 years. All these measures will not kick in until 2011.

The International Monetary Fund (IMF) approved a US$7.6bn standby loan for Pakistan to help the country rebound from financial disaster and avoid defaulting on its debt.

Citigroup's crisis deepened as its shares continued to slump despite a planned investment of about US$250m by Prince Alwaleed Bin Talal, its largest individual investor. The 26.4% fall in shares, which closed at US$4.71 in New York on Thursday 20 November, prompted Citi's directors and executives to look at strategic options, including selling part or all of the company.

JPMorgan has begun what is believed to be a 10% reduction in its workforce. The job cuts, which will happen across all divisions of the investment bank, could be close to 3,000. Currently the bank employs about 29,000 people.

Sir Tom McKillop, chairman, and Sir Fred Goodwin, outgoing chief executive of the Royal Bank of Scotland (RBS), apologised to investors for the bank's troubles and also admitted to shareholders at the bank's meeting called to approve a £20bn capital raising that RBS's ill-timed acquisition of part of Dutch bank, ABN Amro, had "added to our difficulties". Sir McKillop said RBS's acquisition of part of ABN Amro at the height of the markets boom for €71bn had "increased the short-term vulnerability of the group to the financial crisis as it intensified this year".

Hedge fund investors pulled a record US$40bn out of the industry in October, as poor performance prompted a flight to cash, according to data published today. Hedge funds were hit by more redemptions in October than at any time since Chicago-based Hedge Fund Research started compiling figures in 1990, and it has predicted worse to come.

The three biggest US carmakers - Ford, General Motors and Chrysler - have asked US Congress for a $25bn bail out. The bosses told a Senate hearing that without the rescue package their firms risked collapse and warned of broader risks to the US economy.

Barclays has changed the terms of its £7bn capital raising so that investors can participate in the issue of a security paying a 14% coupon. The UK bank also said it would put its entire board up for re-election at its annual meeting next April, "in recognition of the extraordinary circumstances of the capital raising". Unlike other big UK banks, Barclays did not want to accept a bail-out from the UK government and had previously said the move to raise cash from the Middle East would keep it "strong and independent".

Official figures show UK inflation dropped from a 16-year high of 5.2% to 4.5% in October, as oil prices and transport costs fell.

Citigroup has announced plans for about 52,000 new job cuts, on top of 23,000 cuts already made this year. It is estimated that the bank has lost more than US$20bn in the past year because of the global financial crisis.

Nout Wellink, chairman of the Basel Committee on Banking Supervision and president of the Netherlands Bank, presents the Basel Committee's strategy to address the fundamental weaknesses revealed by the financial market crisis that relate to the regulation, supervision and risk management of internationally active banks. Key building blocks include strengthening the risk capture of the Basel II framework (in particular for trading book and off-balance sheet exposures), enhancing the quality of Tier 1 capital and building additional shock absorbers into the capital framework that can be drawn upon during periods of stress.

World leaders pledged to shore up global growth, avoid protectionism and move quickly on regulatory reform at the Washington summit of the Group of 20 (G20). They also pledged a fresh effort to revive the Doha round of trade talks.

India’s central bank has taken emergency measures to avert a growing liquidity crunch affecting the country’s estimated US$43.7bn of outstanding trade finance. The Reserve Bank of India (RBI) more than doubled the funds it makes available for banks to refinance export credit at favourable interest rates to US$4.5bn.

Saudi Arabia resisted international pressure to copy Japan’s example and give the International Monetary Fund (IMF) additional funds to bail out ailing economies. It has opted instead to focus on domestic expenditures.

The number of people out of work in the UK in the three months to September jumped by 140,000 to 1.82 million - the highest in 11 years. The unemployment rate rose to 5.8%, up from 5.4% in the previous quarter, according to official figures. The latest jobs figures came shortly before the Bank of England produced its gloomiest set of forecasts in more than a decade. The Bank said Britain's economy had probably already entered recession and was likely to contract further in 2009.

American Express is the latest financial group to convert to a bank holding company, which gives the credit card group permanent access to Federal Reserve funds.

Santander of Spain announced a deeply discounted €7.2bn rights issue to bolster its capital ratios.

Circuit City, the US electronics retailer, filed for bankruptcy protection, admitting it was struggling to persuade suppliers to keep its stores stocked for the holiday season. With more than 700 stores and 40,000 employees, Circuit City is the largest US retailer to fall victim to the credit crisis.

Carnegie, the Nordic region’s oldest and largest investment bank, was taken over by the Swedish government after its licence was revoked for failures in its internal controls. Carnegie is the first Swedish bank to collapse in the current global financial crisis and the first to be taken over since the country’s banking crisis of the early 1990s.

The pound fell 0.5% to US$1.5730 against the dollar, lost 0.5% to Y156.01 against the yen and dropped 0.8% to £0.8171 against the euro. This is the weakest rate the pound has hit against the euro since it was introduced in 2002.

China announces a a two-year US$586bn financial package to help boost the economy.

The European Central Bank cut borrowing costs by half a percentage point to 3.25%.

The Bank of England has made a 1.5 percentage point cut in UK interest rates to 3%, the lowest level since 1955.

The IMF approves a US$16.4bn loan to the Ukraine to support the country's economy through the financial crisis.

The Italian government will provide up to €30bn in capital for banks so they can keep lending to companies.

Australia’s central bank made a bigger cut than expected in its benchmark interest rate, cutting it by 75 basis points to 5.25 per cent, because of slowing Chinese growth and lower commodity prices, it stated.

Allco Finance, the Australian asset manager that joined forces with Texas Pacific Group and Macquarie in the failed A$11bn buy-out bid for Qantas Airways, has collapsed into receivership owing close to A$1bn.

Commerzbank, Germany’s second largest bank, becomes the first bank to tap into the government’s financial sector bail-out fund in order to increase its capital with an €8.2bn injection. The bank may also draw on state guarantees for €15bn of debt issuance.

HBOS revealed that writedowns against its profit and loss account for the nine months to the end of September would be £5.18bn, a more than doubling of the £2.46bn taken in the first half.

Dexia said would take a €105m net loss in its third quarter, after the Austrian government stepped in to rescue Kommunalkredit, a lender to public authorities. Austria’s finance ministry said it would buy the 99.8% of Kommunalkredit owned by the country’s Volksbanks, a largely rural co-operative banking organisation, and Dexia.

Barclays looks to secure a capital injection worth around £7.3bn from Middle Eastern governments, including the Qatar Investment Authority and an Abu Dhabi-based sovereign wealth fund. If the deal is completed as expected, the Middle Eastern investors will have an almost 32% stake in Barclays.

The US economy shrank at an annualised rate of 0.3% between July and September, according to figures from the Commerce Department. The Federal Reserve has cut its key interest rate from 1.5% to 1% in order to stave off recession.

American International Group (AIG) has raised US$20.9bn from a new Federal Reserve lending facility, which is designed to boost the commercial paper market, to repay part of a Fed loan. As of Wednesday, AIG owed the US government $83.5bn, down from $90.3bn a week ago.

Japan unveils a US$50.8bn economic stimulus package, the second in two months. The stimulus plan follows the passing of a US$2bn supplementary budget earlier this month to fund Japan’s first stimulus package.

American Express announced plans to cut 7,000 jobs as part of a plan to save US$1.8bn by the end of 2009.

Hungary has been granted a $25bn rescue package by the IMF, the EU and the World Bank.

China's central bank has cut the country's interest rate by 0.27% from 6.93% to 6.66% in order to stimulate economic growth; while Iceland's central bank has raised its key interest rate to 18% from 12%.

The Bank of England says the world's financial firms had now lost £1.8 trillion (US$2.8 trillion) as a result of the continuing credit crisis.

The International Monetary Fund (IMF) is to offer a US$16.5bn (£10.4bn) loan to Ukraine.

The European Community announces plans that is ready to participate in a co-ordinated financing package with the IMF to underpin balance-of-payments sustainability in Hungary. The Community stands ready to provide a loan of €6.5bn to Hungary under the Community medium-term assistance facility established under Article 119 of the Treaty in conjunction with IMF assistance to the amount of €12.5bn and World Bank assistance of €1bn. The concrete modalities will shortly be finalised in co-operation with the Hungarian authorities.

The Nordic countries declare their readiness to help Iceland in battling the current financial crisis. A high-level committee will consider Iceland's financial needs following a planned loan from the IMF, and look into how the Nordic states could assist in co-operation with the IMF.

The Danish central bank raises its key interest rate by 0.5 percentage points to 5.5%.

The Office for National Statistics in the UK releases figures that indicate the country is on the brink of a recession. The economy shrank for the first time in 16 years between July and September, as economic growth fell by 0.5%.

The French government will inject €10.5bn into the six largest players in an effort to shore up their balance sheets. Credit Agricole would receive €3bn, BNP Paribas €2.55bn, Societe Generale €1.7bn, Credit Mutuel €1.2bn, Caisse d'Epargne €1.1bn, and Banque Populaire €0.95bn.

The chairman, director general and chief financial officer of Caisse d'Epargne resigns following the bank's €600m loss announced on 17 October. The bank said its problems would not affect its planned merger with Banque Populaire.

ING accepted a €10bn capital injection from the Dutch government to shore up its core capital. The Dutch banking and insurance group also agreed to sell its Taiwan life insurance unit to Fubon Financial for $600m.

South Korea announced a rescue package worth about US$130bn for its banks and companies suffering from a foreign currency liquidity crunch.

BayernLB, the state-owned regional lender, will become the first German financial institution to accept assistance, seeking up to €5bn from the government's €500bn rescue package.

Sweden guarantees new medium-term liabilities of banks up to a level of £117.2bn.

Merrill Lynch CEO John Thain says he expects to see thousands of job cuts in IT, finance, and administration as the company looks for US$7bn in savings from its merger with Bank of America.

French savings bank, Caisse d'Epargne, announces a loss of €600m in a 'trading incident' which the bank said was triggered by what it called "extreme market volatility" amid the market crash during the week of 6 October.

Switzerland has agreed to fund a vehicle that would take on most of the toxic debts held by UBS and injecting €3.9bn to help recapitalise the bank.

Five Austrian banks - UniCredit unit Bank Austria, Erste Bank, Raiffeisen Central Bank, Austrian Volksbanken and BAWAG - have taken over Constantia Privatbank as part of the government's plan to help stabilise financial markets.

Lloyds TSB takeover of HBOS falters. UK Treasury drafts full-blown nationalisation plans.

The G7 nations - which comprises the US, Japan, the UK, Germany, France, Italy and Canada - issued a five-point plan of ‘decisive action’ to unfreeze credit markets, after a meeting in Washington. The specific details of this plan have not been released.

The German and French government unveiled plans to restore liquidity and inject fresh capital into their banking sectors - as part of a co-ordinated bailout campaign by western governments. Germany will inject up to €470bn, while France’s plan totalled €340bn. The Netherlands proposed a €199bn rescue plan and Austria offered a similar package worth €85bn. Spain set aside up to €100bn to back up debt issued by banks this year, and Portugal pledged about €20bn in guarantees. Italy promises banks as much as they need.

Spanish banking group Santander agreed to buy the rest of US banking group Sovereign Bancorp for $2.4bn, a tenth of the price agreed when it took a minority stake three years ago.

The US is expected to commit US$250bn, out of the US$700bn rescue package agreed earlier this month, to a recapitalisation programme, providing a temporary sovereign guarantee for bank borrowing and expand depositor protection. About half the money would be invested in bigger US banks including Bank of America, JPMorgan Chase, Citi, Wells Fargo, Goldman Sachs and Morgan Stanley - with the largest lenders receiving as much as US$25bn.

Royal Bank of Scotland, Lloyds TSB and HBOS agreed to scrap dividend payments in exchange for a government rescue package of £37bn.

The Federal Reserve has approved a $12bn takeover of Wachovia and its subsidiaries by Wells Fargo, beating out Citi.

Britannia, the UK’s second-largest building society, is in early stage discussions with the financial services arm of the Co-operative Group about combining the two businesses.

Commonwealth Bank of Australia (CBA) acquires BankWest unit - which operates in Western Australia - from UK's HBOS - for US$2.1bn. BankWest will now be part of CBA's four year migration of its core banking operations to the SAP for Banking platform, which was outlined in April.

The US stock market suffered its largest loss since the crash of 1987 amid panic over General Motors, Morgan Stanley and several big insurance companies.

Russia approved a raft of measures worth US$86bn to assist banks hit by the credit freeze. The government will make US$50bn available to banks and firms that need to refinance foreign debt. The rest will be available as loans to banks.

The UK government agrees a £400bn three-prong plan to bail out British banks. The government could invest as much as £50bn in the banking industry while offering guarantees over as much of £250bn of new bank debt and adding £100bn to the existing Bank of England short-term loan scheme. The banks involved are Abbey, now part of Santander of Spain, Barclays, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and Standard Chartered as well as Nationwide Building Society.

Six central banks - the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank, and the Swiss National Bank - announce reductions in policy interest rates.

The Federal Reserve agrees to inject up to an additional US$37.8bn into AIG.

UK government announces plans to sue Iceland over UK customer deposits in Icesave, the failed Internet bank seized by Iceland.

ING Direct UK will acquire £2.5bn of deposits and 160,000 customers from Kaupthing Edge. The group is also acquiring £538m of savings held by 22,200 people with Heritable Bank, a subsidiary of Landsbanki.

Russia commits to pumping US$37bn in long-term loans into its biggest state banks.

The Federal Reserve announced a new commercial paper lending facility to jump start funding for companies.

Commonwealth Bank of Australia is in talks to buy BankWest, the Australian subsidiary of HBOS, in a deal for A$2bn.

Germany announces a €50bn plan to save one of the country's biggest banks, Hypo Real Estate, which is worth €15bn more than the first rescue attempt, which fell apart a day earlier.

French bank, BNP Paribas, buys the Belgian insurance business of Fortis while ownership of EMCF, the Fortis Bank subsidiary that provides clearing services to Instinet Chi-X and Nasdaq OMX, passes to the Dutch government as part of a €16.8bn rescue package.

Iceland's government takes control of the country's second largest bank, Landsbanki.

Nomura International , the Asia-based investment bank, announces that the conditions to closing the acquisition of Lehman Brothers' investment banking and equities businesses in Europe and the Middle East had been met. The deal will become legally effective on Monday 13 October. Nomura Holdings also announces that it has made an agreement with Lehman Brothers Holdings Inc. to acquire Lehman Brothers Services India Private Limited, Lehman Brothers Financial Services (India) Private Limited, and Lehman Brothers Structured Finance Services Private Limited, all specialised service companies based in Powai, Mumbai.

Wells Fargo announces it is set to buy Wachovia for US$15.1bn, which scuppers an earlier US government-backed rescue deal in which Citi would buy Wachovia's banking arm for US$2.2bn.

Dexia becomes the latest European bank to be bailed out as the deepening credit crisis continues to shake the banking sector. The Belgian, French and Luxembourg governments said they would put in €6.4bn to keep it afloat.

In Britain, the mortgage lender Bradford & Bingley is nationalised. The British government takes control of the bank's £50bn mortgages and loans, while its savings operations and branches are sold to Spain's Santander.

The Icelandic government takes control of the country's third-largest bank Glitnir after the company had faced short-term funding problems.

The credit crunch hits Europe's banking sector as the European banking and insurance giant Fortis is partly nationalised to ensure its survival. It is seen as too big a European bank to be allowed to go under.

In the largest bank failure yet in the US, Washington Mutual (WaMu), the giant mortgage lender which had assets valued at US$307bn, is closed down by regulators and sold to JPMorgan Chase.

Nomura Holdings, Inc. announces it has agreed to acquire Lehman Brothers' franchise in the Asia Pacific region including Japan and Australia. The transaction is subject to a number of conditions.
The deal includes all of Lehman Brothers' franchises and approximately 3,000 employees in multiple locations in the Asia-Pacific region.

Britain's biggest mortgage lender HBOS is taken over by Lloyds TSB in a £12bn deal creating a banking giant holding close to one-third of the UK's savings and mortgage market. The deal follows a run on HBOS shares.

UK bank, Barclays, buys Lehman Brothers' north American investment banking and trading unit for US$250m, and pays US$1.5bn for its New York headquarters and two data centres.

The US Federal Reserve announces an US$85bn rescue package for AIG, the country's biggest insurance company, to save it from bankruptcy. AIG gets the loan in return for an 80% public stake in the firm.

After days of searching frantically for a buyer, Lehman Brothers files for Chapter 11 bankruptcy protection, becoming the first major investment bank to collapse since the start of the credit crisis.

US bank Merrill Lynch agrees to be taken over by Bank of America for US$50bn.

Mortgage lenders, Fannie Mae and Freddie Mac, which account for nearly half of the outstanding mortgages in the US, are rescued by the US government in one of the largest bailouts in US history.

At the same time, in the UK, the Nationwide merges with two smaller rivals, the Derbyshire and Cheshire Building Societies.

The Basel Committee on Banking Supervision issues for public comment 'Guidelines for Computing Capital for Incremental Risk in the Trading Book', as well as Proposed Revisions to the Basel II market risk framework.

Wall Street's fifth-largest bank, Bear Stearns, is acquired by JPMorgan Chase for US$240m in a deal backed by US$30bn of central bank loans.

Shares in Northern Rock are suspended and the UK bank is nationalised, after UK Chancellor, Alistair Darling, announces that neither of the two proposals tabled for Northern Rock - one from a group led by Virgin and the other from in-house management - offer enough value to the taxpayer.

And there it is folks, cascading failures going back a year.

1 posted on 01/27/2009 5:17:04 PM PST by JerseyHighlander

Bookmarked

Thanks. I keep trying to get leftists to close their damn mouths and learn some facts. This may help, maybe.

2 posted on 01/27/2009 8:37:53 PM PST by Islander7 (LOST TAGLINE - If found, please return. LARGE Reward.)

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The Credit Crisis Timeline 27 Jan 2009

The Credit Crisis Timeline
27 Jan 2009