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

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