April 2007 witnessed the collapse of sub-prime lender New Century Financial and this collapse was only the first of many casualties. The British government nationalized the mortgage lender Northern Rock and soon afterwards Bear Stearns collapse due to subprime loans. Fannie Mae and Freddie Mac were nationalized in September 2008 because of the great losses suffered due to mortgage defaults. Soon afterwards Lehman Brother, the United State's fourth largest investment bank collapse and this is stated to have "greatly intensified the financial crisis." (Jawai, 2008, p.2)
V. TIME SEQUENCE OF THE GLOBAL FINANCIAL CRISIS
Month
Year Event
July
2007
Financial crisis begins with the United States subprime mortgage crisis
August
2007
US financial crisis reaches global proportion due to interaction between the world banks and Hedge Funds with subprime mortgage backed securities.
August
2007
The European Central Bank injects 95 billion euros into...
Federal Reserve injects 43 billion U.S. dollars and the U.S.
Housing problem begins in earnest.
September
2007
Interest rates lowered in U.S. And British Government takes over
Northern Rock -- a major bank in the UK. Internet bank: Netbank goes bankrupt.
December
2007
ECB loans European commercial banks in excess of $500 billion over
the Christmas period to ease the credit crisis.
January
2008
Stock markets downturn
February
2008
House prices continue to fall, jobs cut and houses repossessed.
Worldwide losses are projected to reach $400 billion.
March
2008
JPMorgan Chase acquires Bear Stearns to avoid bankruptcy and Peloton Partners a £1bn hedge fund collapses
April
2008
Deutsche
April
2008
Deutsche
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