Great Recession/Timelines
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2002-2007 US housing boom and bust
- The average price of a US house increases by about 70% between 2000 and 2006 [1].
- Two of the Bear Stearns bank's hedge funds suffer losses from mortgage defaults [2] and yhe American Home Mortgage Corporation becomes bankrupt [3]..
2007-2008 International financial panic
- August 9: The French bank BNP Paribas freezes its funds because it is unable to value their mortgage-backed assets. [4]
- September 12 The Lehman Brothers investment bank becomes bankrupt[5] with losses of up to $160 billion to holders of its unsecured bonds prompting a sudden loss of confidence in money market funds and the onset of a credit crunch.
2008-2009 The international response
The Banking systems rescues.
- The UK's Gordon Brown offers unlimited support to all UK banks by capital support, equity purchase and lending guarantees [6] [7], and similar action is agreed by European Union leaders [8] and the US President[9]and there are rescues of individual banks in Europe [10][11] [12][13] and the United States [14].
The coordinated monetary stimulus.
- A discount rate cut of half per cent by the central banks of the United States, Europe, China, Britain, Canada, Sweden and Switzerland [15].
Agreement on a collective fiscal stimulus
- November 15: The first G20 summit of leaders of the Group of Twenty countries agree to take expansionary fiscal action
- The money market panic persists (LIBOR-OIS spreads reach over 350 basis points (compared with August 2007 rates of around 10 points)[16].)
Domestic measures