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Countdown to the credit crunch
22.12.08
How the credit crunch sent the world into recession...
22 February 2007: First warning as HSBC says its potential losses on American sub-prime mortgages have mushroomed.
2 April: New Century Financial, the second-largest provider of sub-prime loans in the US, files for bankruptcy protection.
19 July: Ben Bernanke, chairman of the Federal Reserve, warns sub-prime losses could amount to $100 billion.
August: Credit supplies go into freefall on both sides of the Atlantic, forcing up the costs banks incur for borrowing money from each other.
9 August: Central banks around the world make the first injection of cash into the banking system with more than $100 billion of funds.
14 September: savers rush to take cash out of Northern Rock after it calls for state aid because it cannot afford to borrow on the wholesale markets.
6 December: Bank of England cuts interest rates to 5.5 per cent.
21 January 2008: Crisis cut by Federal Reserve of 0.75% as sub-prime losses mount.
30 January: Another US cut by 0.5%.
7 February: Bank of England follows US lead with 0.25% cut to 5.25%.
17 February: Northern Rock is finally nationalised.
17 March: Federal Reserve makes string of interventions to save Bear Stearns.
21 April: Bank of England plans £50 billion bank bail-out as Bank of Scotland calls for £10 billion rights issue.
15 May: Cost of interbank lending soars after string of institutions admit extent of sub-prime losses.
30 August: Chancellor Alistair Darling warns economy is facing worst crisis in 60 years.
4 September: Interest rates held at 5%.
16 September: Black Monday: Lehman Brothers goes into administration and Merrill Lynch is forced into takeover by Bank of America. A day later AIG is rescued before it collapses, HBOS is forced into the arms of Lloyds TSB and the markets plunge.
8 October: Government unveils £50 billion banks rescue and Bank cuts interest rates to 4.5%, far ahead of US level (1.5%) and Eurozone (3.75%).
6 November: Dramatic emergency interest rate cut to 3%.
4 December: Another rate cut to 2%.
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January 2009 Rate cut to 0.5% GBP1 = EUR 0.95
March 2009 Rate up to 2% to protect GBP GBP1 = EUR 1.05 Unemployment up by a record 250,000 in a month
May 2009 Jack Straw is confident that Labour will win the upcoming election.
June 2009 Whole Government sectioned for Paranoid Schizophrenia
- Dave Davies, Basingstoke
