The Credit Crisis Timeline
The Credit Crisis Timeline
21 Aug 2009
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.
21 August
The Organisation for Economic Co-operation and Development (OECD) has said the economies of its members stabilised in the last quarter. The gross domestic product (GDP) in the 30 most industrialised nations was flat in the three months to June, after shrinking 2.1% in the previous quarter. Japan, France and Germany have recently emerged from recession, raising hopes the global economy is recovering.
Industrial and Commercial Bank of China (ICBC) provided evidence of the extraordinary recent expansion in Chinese bank lending when it revealed it had increased its loan book by 19% in the first half of the year. The world’s largest bank by market value said it had increased lending by Rmb864.5bn (US$126.5bn) in the first half, an amount roughly equal to the annual gross domestic product of Peru or New Zealand. ICBC reported a 3% rise in net profit in the first half to Rmb66.42bn. But this came against a backdrop of falling profitability as state-controlled banks rushed to extend loans at Beijing’s behest to infrastructure and industrial projects.
Six of South Korea’s leading banks signed a preliminary deal to set up a private bad bank, in an attempt to spark greater competition in a market for toxic assets that is monopolised by a state-run bad bank. The banks, led by Shinhan and Kookmin, expect the bad bank to be set up by the end of next month, run until 2014 and clear up some Won5,000bn (US$4bn) of troubled loans. The other banks involved are Hana, Woori, the Industrial Bank of Korea and Nonghyup, according to a statement from the Korea Federation of Banks.
The US Justice Department has given its approval for business software firm Oracle to take over computer hardware software maker Sun Microsystems. The US$7.4bn deal was agreed by the two in April this year, but still needs approval from the European Commission before it can be concluded.
Mexico's economy shrank by 10.3% between April and June as the global downturn hit demand for exports and swine flu drove tourist numbers down. The decline was blamed on slides in the industrial and services sectors, which are closely tied to the US and have felt the force of the economic crisis.
20 August
The US and Switzerland have signed an agreement designed to end a tax evasion dispute surrounding UBS's US customers. The Swiss banking giant will now give the US tax authorities the details of 4,450 accounts, US officials said. Hours after the deal was agreed, the Swiss government said it was putting its 9% stake in UBS up for sale.
The UK’s public sector net borrowing totalled £8bn last month, the first July deficit for 13 years, official figures have shown. The figure was much worse than the £500m deficit expected by analysts, and comes as the recession continues to reduce the government's tax returns.
19 August
The International Monetary Fund’s chief economist described a “nascent” global recovery, but warned that US policymakers walked a tightrope in timing the end of the fiscal stimulus. Olivier Blanchard wrote that a rebound in US consumer confidence and increased US exports to surplus countries in Asia were needed to replace higher public spending. But in a cautionary IMF paper, he said “it is clear” that the rebalancing may not take place, “at least not on the scale needed”.
A key measure of inflation in the UK has unexpectedly remained at 1.8%. Economists had expected the Consumer Prices Index (CPI) to decline to 1.5% in July. The Retail Prices Index (RPI) inflation measure, which includes mortgage interest payments, also unexpectedly rose to -1.4%, from -1.6%. The RPI rate has fallen sharply over the past year as the Bank of England slashed interest rates to a record low amid a recession.
Qantas Airways has posted an 88% drop in its annual profits, as it continues to struggle with the economic downturn. The Australian airline said net income for year to 30 June fell to A$117m (US$96.5m).
The South African economy contracted for the third quarter in succession between April and June, the latest official figures have shown. It shrank at an annualised rate of 3% during the second quarter of 2009, a less severe decline than the 6.4% contraction from January to March. Manufacturing was the worst performing sector, seeing output slide 11%. The central bank cut interest rates last week to help the economy and the government has a stimulus plan.
18 August
The Federal Reserve and the US Treasury extended a US$200bn programme designed to revive the securitisation market, bringing relief to investors concerned that the supply of cheap government financing was set to end. The term asset-backed securities loan facility (Talf), in which the Fed lends to investors wanting to buy securitised loans, is to be extended by three to six months from the original year-end expiry date.
17 August
Japan has climbed out of recession after the economy returned to growth in the second quarter, raising hopes that the worst of the financial crisis is over in the world’s second-largest economy. Data showed that gross domestic product (GDP) expanded 0.9% quarter on quarter on a seasonally adjusted basis, following four quarters of contraction. On an annualised basis, the economy grew 3.7%. Thanks to the government’s stimulus programme, which amounts to about 4% of GDP, public investment expanded 8.1% in the quarter. Exports were also robust, growing 6.3% in the period. Private consumption grew 0.8%.
Colonial BancGroup has become the biggest US bank to collapse this year. Colonial, a property lender based in Montgomery, Alabama, had about US$25bn of assets, said the US regulator, the Federal Deposit Insurance Corp (FDIC). The agency approved the sale of Colonial's US$20bn in deposits to BB&T, a North Carolina-based bank. BB&T will also buy US$22bn of Colonial's assets.
The Nigerian central bank has injected 400bn naira (US$2.6bn) into five banks and sacked their managers. The regulator said the banks were undercapitalised and posed a risk to the entire banking system. Governor Lamido Sanusi said Afribank, Finbank, Intercontinental Bank, Oceanic Bank and Union Bank would be run as normal until new investors were found.
The economy of Hong Kong has emerged from recession, posting growth of 3.3% in the three months from April to June. It followed the emergence from recession of Singapore, which grew an annualised 20.7% in the second quarter. Hong Kong's growth was negative for four consecutive quarters, starting in the second quarter of 2008. The growth of 3.3% compares with a revised contraction of 4.3% for the first three months of 2009.
US industrial production rose 0.5% in July, stronger than expected and the first rise in nine months. The jump in production from America's mines, factories and utilities was helped by a 20.1% rise in production of motor vehicles and parts.
South Africa's central bank has taken markets by surprise by cutting its lending rate from 7.5% to a four-year low of 7%. It was the sixth cut since December, bringing the rate down from 12%.
14 August
US Federal Reserve policymakers have said that “economic activity is levelling out” and gave no indication that they would step up emergency measures adopted to stimulate the flow of credit. The Fed said that it “anticipates” completing its planned US$300bn treasury purchases by October - a month later than expected - but there was no echo of the Bank of England’s decision to expand its government debt-buying programme. The plans are a way to ease monetary policy even when interest rates are close to zero. Nor was there any change to the Fed’s pledge to hold interest rates at “exceptionally low levels...for an extended period” as the key federal funds rate was maintained at 0% to 0.25%.
The Bank of England delivered a more robust forecast for the UK economy over the rest of this year and into 2010, even as it warned that the recovery was likely to be “slow and protracted”. The bank’s quarterly inflation report underlined that interest rates are set to stay low for a longer period than expected by the market and that its £175bn programme of cash injections into the economy was unlikely to be unwound any time soon.
The volume of goods leaving factories in the eurozone declined in June after rising for the first time in many months in May. Eurozone industrial output fell 0.6% in June, the European statistics office said, pouring cold water on economists’ forecasts of another modest gain after an increase in production of 0.6% the prior month.
Lloyds Banking Group has agreed to sell its Insight asset management business to Bank of New York Mellon (BNY) for £235m. BNY is taking on £80bn in funds managed by Insight for clients outside the Lloyds group, as well as the Insight management team led by Abdallah Nauphal. The £235m price tag consists of £200m in cash and the remainder in equity.
Muslim Commercial Bank (MCB), Pakistan’s biggest lender by market value, has struck a deal to buy a 99.4% stake in Royal Bank of Scotland’s (RBS) Pakistan unit for a US$87m.
India’s government is planning a big shake-up of its archaic tax system in a bid to curb widespread evasion as it confronts a sharply widening fiscal deficit amid expanding social welfare programmes. The plan, announced by Pranab Mukherjee, the finance minister, aims to foster greater compliance with tax laws by lowering key corporate and personal income tax rates, simplifying rules and eliminating exemptions blamed for eroding the tax base. Corporate taxes on Indian companies will drop to 25% from 30%.
13 August
Both France and Germany record economic growth of 0.3% between April and June 2009, bringing to an end year-long recessions in these two large European economies. Government stimulus packages, stronger exports and a rise in consumer spending are attributed to the growth.
12 August
Dutch financial services group ING has returned to profit after three quarters of losses - though its banking division unexpectedly lost money. The firm made €71m in the three months to the end of June, down from €1.92bn a year earlier.
Commonwealth Bank of Australia (CBA), the country’s second largest lender by market capitalisation, said that annual net profit fell 1% after bad debt charges rose and its wealth management unit generated less income, beating analysts’ expectations. For the full year ended June 30, Commonwealth posted net earnings of A$4.72bn (US$3.89bn), compared with A$4.79bn a year earlier and A$4.64bn forecast by analysts polled by Bloomberg. Bankwest, a local player acquired from the UK’s HBOS last year, contributed A$612m.
About 5,000 British investors with an estimated £2bn to £3bn in secret Liechtenstein bank accounts will be asked to come clean under a ground-breaking deal. HM Revenue & Customs (HMRC) wants to prise open the accounts by offering investors the chance to volunteer details of their deposits in return for limited penalties. Liechtenstein banks will be asked to close the accounts of customers who do not take up HMRC’s offer. Germany is looking to follow suit.
The number of people out of work in the UK has risen to its highest level since 1995, official figures have shown. Unemployment increased by 220,000 to 2.44 million in the three months to June, taking the jobless rate to 7.8%.
Japanese wholesale prices were down by a record 8.5% in July compared with a year earlier, highlighting the growing deflationary pressure in the economy.
11 August
China's economy has shown signs of improvement, with the annual growth rates of both industrial output and retail sales rising last month. July's industrial production rose 10.8% year-on-year, while retail sales grew at an annual pace of 15.2%.
Japanese consumer prices fell by a record 1.7% in the year to June, driven down by falling fuel costs, official figures have shown.
Latvia saw its Standard & Poor’s (S&P) credit rating cut for the fourth time in a year as the country revealed that its economy shrank by a fifth in the second quarter. S&P said it was cutting Latvia’s sovereign rating a notch deeper into junk status from BB+ to BB, citing the “political and economic challenges” facing the country as a result of “rapidly contracting” incomes and the associated pressure on public finances. Latvia’s gross domestic product fell an annual 19.6% in the second quarter - slightly worse than the 18% fall registered in the first quarter.
Northern Bank has reported a loss of £69m for the first six months of 2009. The bank made an operating profit of £35m, but had to set aside £104m to cover loans it thinks might not be repaid.
10 August
Mexico is in the grip of a deep recession. Gross domestic product (GDP) in the second quarter is expected to fall by 10.4% year-on-year, following a first-quarter drop of 8.2%, according to the finance ministry. The International Monetary Fund (IMF) predicts that, for the full year, the economy will fall by 7.3%, the worst performance in Latin America - worse than in the 1995 ‘tequila crisis’ or the debt crisis of 1982.
The UK's Financial Services Authority (FSA) is to publish a code this week setting out how banks will have to change their policies on pay and bonuses.
The International Monetary Fund (IMF) and Angola have agreed to begin talks on a loan to help the African country cope with the global economic slowdown. The IMF said it had been assessing the economy and talking to officials, and negotiations would start next month. Angola, one of Africa's largest oil producers, has been hit by the fall in the price of oil since last year.
India and South Korea have signed an agreement to reduce tariffs on goods and services to boost commerce between the two nations.
7 August
The European Central Bank (ECB) has left its main interest rate unchanged at 1%, just hours after another surge in Germany industrial orders lifted hopes of an early end to the severe recession in Europe’s largest economy. German industrial orders rose by a much higher-than-expected 4.5% in June, extending an already-strong 4.4% rise in the previous month, according to the Berlin economics ministry.
Royal Bank of Scotland Group, which is 70%-owned by UK taxpayers, has reported a pre-tax profit of £15m for the first six months of the year.
The prices of goods leaving UK factories fell at their sharpest annual pace in nearly eight years last month, official figures have shown. ‘Factory gate’ prices in July were down 1.3% from a year ago, although they were up 0.3% from June. Input prices - the cost of materials and fuels that manufacturers buy - fell at the steepest annual rate in almost 23 years, down 12.2%.
Italy's economy shrank by 0.5% in the second quarter of 2009, a smaller contraction than expected, official figures have shown. This is Italy's fifth consecutive quarterly fall in GDP, and compares with a record 2.7% contraction in the first quarter of the year.
NASDAQ OMX has revealed the effects of a bruising price war as it said its share of US equity trading dropped by a third and its second quarter profits suffered a similar drop. The transatlantic exchange reported a 31% fall in net profit to US$69m, or US$0.33 per diluted share, for the quarter, compared to US$100m, or US$0.47 per diluted share, in the same quarter last year.
6 August
The Bank of England has decided to pump another £50bn of new money into the economy in their programme of quantitative easing. It will take their total spending to £175bn, unexpectedly going over the £150bn set aside by the chancellor. The rate-setters also decided to keep interest rates unchanged at their historic low of 0.5% for a sixth month.
Goldman Sachs traders made more than US$100m in revenues on each of a record 46 days during the second quarter, while losing money on just two days, the bank said in a filing that underscored the strength of its trading operations.
A survey showed US companies cut a worse than expected 371,000 jobs last month, but the haemorrhaging of jobs across the economy continues to slow. The ADP National Employment Report, published with Macroeconomic Advisors, showed its smallest decline since October. Economists surveyed by Bloomberg expected, on average, a decrease of 350,000.
Germany's Commerzbank has reported further losses as it struggles to recover from the financial crisis. The bank made a net loss of €763m between April and June, a slight improvement on the €861m loss it made in the previous quarter.
5 August
UniCredit - Italy’s biggest bank and one of the largest lenders to recession-hit east European economies - announced better-than-expected second quarter profits. The figure was sharply down on the same period a year ago. However, it was more than 9% ahead of the first quarter of this year, reflecting a better operating trend at the diversified Milan-based bank, which has operations stretching from Italy to Poland, Germany and Kazakhstan.
Société Générale has reported a slump in profits of more than a half as it was forced to write off bad debts and investments in risky assets. The bank made €309m between April and June, down 52% on the €644m it made in the same period a year earlier.
Sportswear giant Adidas has reported a fall in profits for the April to June period of 93% as consumer spending fell during the economic downturn.
4 August
ANZ will buy Royal Bank of Scotland’s operations in six Asian countries for US$550m. ANZ, which wants to generate a fifth of its earnings from Asian operations, will buy RBS’s retail, wealth management and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong, as well as the UK bank’s institutional banking businesses in Taiwan, the Philippines and Vietnam.
Global manufacturing is clearly on the rebound, with Markit’s survey showing activity contracting at a significantly slower pace in the US and continental Europe, and UK industry back on a growth path. In the US, the July ISM manufacturing index rose 4.1 points to 48.94. This is the slowest pace of contraction since August 2008, before the collapse of Lehman Brothers, although still the 18th consecutive monthly decline. The new orders and production indices - indicative of prospects for future growth - both rose over the month. New orders jumped 6.1 points to 55.34, growing for only the second time since December 2007, while the production index rose 5.4 points to 57.95, growing for the second consecutive month.
UBS, Switzerland's biggest bank, has reported a loss of 1.4bn Swiss francs (US$1.32bn) for the April to June quarter. The loss is a slight improvement on the 2bn Swiss franc loss the bank made in the first quarter of this year.
World stocks have risen, boosted by encouraging manufacturing figures and solid earnings results. The Standard and Poor's 500 index tipped beyond 1,000 for the first time since November and the Nasdaq hit above 2,000 - the first time since October. The three major US indexes all added 1.25% or more by close of trade after a manufacturing survey rose in July. European indexes rose with London's FTSE closing at its highest since October and the pound rising. France's Cac 40 rose 1.5% and Germany's Dax added 1.78%.
3 August
Barclays has announced an 8% rise in first-half profits, boosted by its investment banking division. Pre-tax profits for the first six months came in at £2.98bn, although this was slightly below analysts' forecasts.
Banking group HSBC saw pre-tax profits halve to £2.98bn in the first six months of 2009. Rising bad debts in the US, Europe and Asia forced it to write-off US$13.9bn - 39% more than the same period in 2008.
Eurozone unemployment hit 9.4% in June - the highest in 10 years and another sign of the economic slowdown. The number of jobless grew by 158,000 during the month, taking the total number of unemployed in the area using the euro to 14.9 million.
31 July
The global credit crunch has cost governments more than US$10 trillion, the International Monetary Fund (IMF) said. The IMF says that rich countries have provided US$9.2 trillion in government support for the financial sector, while emerging economies spent US$1.6 trillion. Around US$1.9 trillion represents up-front expenditure, while the rest is made up of guarantees and loans.
The UK government's plans for reforming the regulation of banks are "largely cosmetic" and "lack clarity", MPs in the Treasury Select Committee said. In its report on the banking crisis, the committee says that responsibility for strategic decisions and action remains "a muddle". The report also says that the Financial Services Authority (FSA) "failed spectacularly" in supervising banks.
Japan's biggest bank, Mitsubishi UFJ, has returned to profit, boosted by a recovery in the stock market. The bank reported a net profit of Y75.9bn (US$794m) for the April to June quarter, which was a rise of 24.7% on the same period a year ago.
Mizuho Financial Group made its fourth consecutive quarterly loss between April and June because of credit costs and losses on derivatives taken out to hedge against further declines in the market. The net loss for the quarter was Y4.4bn (US$46m). Mizuho’s operations produced a net profit of Y160.1bn, before credit provisions of Y76bn, valuation losses on hedges on Y88bn, and losses on stock holdings of Y19.8bn.
Citigroup and Merrill Lynch, which lost US$55bn in 2008, between them paid 1,400 employees bonuses of $1m or more each, according to a New York state report on banks propped up with taxpayer funds. The study, compiled by Andrew Cuomo, New York attorney-general, showed that JPMorgan Chase and Goldman Sachs, which both finished in the black last year, paid the most million-dollar bonuses - 1,626 and 953, respectively. However, the totals at a profitable bank such as Goldman were nearly matched by two of the year’s biggest losers on Wall Street. Citi, which suffered a US$27.7bn loss, paid million-dollar bonuses to 738 employees. Merrill, which lost US$27.6bn, paid 696 bonuses of US$1m or more.
Citigroup said it would raise Y112.4bn (US$1.2bn) by selling its Japanese fund management arm. Citi agreed to sell Nikko Asset Management to Sumitomo Trust & Banking, Japan’s fifth-biggest bank. The sale is Citi’s second significant divestment in Japan this year, after it reached a deal in April to sell Nikko Cordial, its local securities broker.
Japan saw unemployment levels reach a six-year high last month, with job availability at a new low, official figures have shown. The jobless number increased by 830,000 in June, or 31.3% from a year before, to 3.48 million. The unemployment rate was 5.5% up from May's figure of 5.2%. For every 100 people seeking work, there were 43 jobs.
30 July
The pace of economic decline has moderated or stabilised in most parts of the US, the Federal Reserve said, with manufacturing, residential property and even employment showing some signs of improvement. According to the Beige Book, which offers a picture of the economy based on anecdotal evidence provided to the US central bank, overall economic activity has stabilised at a low level since its last report in early June when most regions reported that conditions were weak or worsening. The report adds to mounting evidence that the worst recession in the past 50 years is easing.
Japanese industrial output rose for the fourth month in a row in June and is expected to keep climbing as manufacturers restart production lines halted during the country’s sharpest post-war slump. Preliminary data released by the Ministry of Economy, Trade and Industry showed June industrial production was up 2.4% month-on-month, a rate of increase lower than the revised 5.7% growth recorded for May but broadly in line with economists’ expectations.
Banco Santander has appointed advisers to spin off its Brazilian business in an initial public offering that could raise at least US$3bn and create one of the largest publicly listed banks in Latin America’s biggest economy.
The International Monetary Fund (IMF) has said it will boost lending by up to US$17bn between now and 2014 and suspend interest on some loans to low income countries until 2011. It plans to sell some of its gold reserves to raise funds for the loans.
28 July
Deutsche Bank has reported a 67% rise in quarterly profits, boosted by its investment banking arm. Germany's largest bank announced a net profit of €1.1bn for the second quarter of 2009, compared with a €645m profit a year ago.
Commerzbank is to sell Dresdner Bank’s Swiss subsidiary to LGT Bank of Liechtenstein as it presses ahead with reorganisation after last year’s troubled takeover. The decision demonstrates what analysts reckon will be a trend to consolidation in the wealth management industry, as profits have fallen, banks’ capital bases remain weak, and pressure intensifies for countries to lift the veil on banking secrecy. The deal emphasises Commerzbank’s intention to stick to its core markets and businesses after taking over Dresdner.
Banco Popular of Spain unveiled a 35% year-on-year fall in first-half net profits, as heavy bad loan provisioning and impairment charges eroded steady underlying growth. The bank, the country’s third largest listed lender by market value, said net profits for the six months to the end of June were €442.6m, compared with €677.5m in the same period last year.
Spain's second-largest bank, BBVA, has reported a 35% rise in quarterly profit thanks to higher income from its loans. BBVA said net profit for the April to June period was €1.56bn, compared with €1.16bn in the same period last year.
The Reserve Bank of India (RBI) has kept interest rates at record lows in a continuing effort to return the economy to growth. The repo rate - at which the central bank injects short-term money into the banking system - was held at 4.75%. The cash reserve ratio - the percentage of banks' deposits they must keep in cash - was also held at 5%.
27 July
The US government is poised to take a 34% stake in Citigroup, increasing both its exposure to and influence over the troubled financial group, following a long-awaited US$58bn share offering.
24 July
The UK economy contracted 0.8% between April and June, more than double the figure economists had expected. The contraction was much less than the 2.4% seen in the first quarter but was still above analysts' 0.3% prediction. The latest figures take the annual rate of decline to 5.6%, the biggest fall since records began in 1955.
American Express (Amex) reported an 84% drop in second-quarter earnings per share. Amex posted earnings of US$337m, or nine cents per share, compared with earnings of US$653m, or 56 cents per share, in the second quarter of last year.
South Korea’s economy grew 2.3% in the second quarter compared with the first three months of the year, supporting the view that Asia’s fourth-biggest economy will be one of the first to sail clear of the financial storm.
Ford Motor reported a surprise US$2.3bn second-quarter net profit, thanks largely to April’s debt restructuring deal but also to well-received models that boosted its share in markets around the world.
The slide in Japan's exports slowed in June in a sign government stimulus spending around the world may be propping up demand. But they were still 35.7% lower than the same month a year earlier.
23 July
Morgan Stanley made a loss of US$159m between April and June, a significant drop on the US$698m profit it made in the same period a year earlier. It is the third consecutive loss for the Wall Street bank and was worse than analysts had expected. It was also hit by the cost of repaying government funding. Including that charge, losses totalled US$1.3bn.
Swiss bank Credit Suisse has continued its recovery, with second quarter profits up 29%. For the April to June period of 2009, the lender made a net profit of 1.571bn Swiss francs (US$1.48bn).
The Asian Development Bank has predicted that growth in 2010 would be double that of 2009. However, the bank warned there were risks to recovery, including over-enthusiastic regulation of the financial sector. The bank estimated that aggregate gross domestic product growth of the grouping - which includes the 10 members of the Association of South East Asian Nations (Asean), China, Hong Kong, Taiwan, and South Korea - would rise from 3% this year to 6% in 2010.
Japan’s trade surplus widened for the first time since October 2007, largely as imports declined at a faster pace. Ministry of Finance data showed that the country’s trade surplus reached Y508bn (US$5.4bn), while imports dropped 41.9% to Y4,092bn, a slightly slower decline than May’s 42% drop.
22 July
National Australia Bank (NAB) launched its second-large equity raising in eight months with a move to secure up to A$2.75bn (US$2.25bn) from investors to fund growth and bolster its capital position. NAB said the funds were needed to maintain balance sheet strength and to provide firepower for possible acquisitions. NAB last month agreed to spend up to A$925m to buy the Australian life and wealth management businesses owned by Aviva, the UK insurer.
A leading think-tank is predicting it may take another five years for UK income per head to return to the level it was before the recession hit in early 2008. The National Institute of Economic and Social Research (NIESR) sees total UK GDP falling 4.3% in 2009 before growing 1% in 2010 and 1.8% in 2011.
The Bank of England's interest rate setters voted unanimously to hold interest rates at the record low of 0.5% earlier this month. The Monetary Policy Committee (MPC) also agreed to maintain its £125bn quantitative easing (QE) programme.
21 July
The total exposure of the US government to the financial crisis could hit US$23.7 trillion, according to a watchdog report. Neil Barofsky, overseeing the Troubled Asset Relief Programme (Tarp), made the estimate in prepared remarks to a House of Representatives committee. The worst-case estimate represents the maximum exposure if all parties offered support requested maximum assistance. The figure includes all government and Federal Reserve initiatives.
Total outstanding government debt in the UK has risen to a record £799bn, or 56.6% of UK GDP - the highest since records began in 1974. Figures showed the government borrowed £13bn in June, almost twice as much as a year ago, after the downturn shrank tax receipts.
The UK has the highest percentage of financially distressed companies in western Europe, as a result of its position as the leveraged buy-out capital over the past decade. The UK has just under a quarter of all distressed assets, as at 1 July, said bankers at Close Brothers in a report based on data from Debtwire. The UK had 24% of all distressed companies in 2009, while Germany had 14%, Italy had 12% and France had just 6%.
Banks that have agreed to pay their executives a guaranteed bonus for more than a year risk heavy penalties, the head of the Financial Services Authority (FSA) has warned. In a letter sent to more than 40 chief executives within the financial services industry, FSA chief executive Hector Sants said that using long-term guarantees to lure star investment bankers could put them in breach of the authority’s new remuneration code. The new rules will cover all deals struck since the FSA first opened its pay consultation in March, meaning that bankers who have recently negotiated guaranteed bonuses may see them revoked.
SEB, one of Sweden’s largest banks, announced a SKr3bn (US$388m) writedown on the value of its eastern European assets in the latest sign of how economic turmoil in the region is hurting Nordic lenders. The writedowns in Latvia, Lithuania, Estonia and Russia showed how the bank’s heavy investments across the Baltic have turned sour as the former Soviet states have plunged into deep recession.
Sri Lanka has agreed a US$2.5bn loan accord from the International Monetary Fund (IMF) to the help it weather the global economic crisis.
20 July
Iceland will announce a €1.5bn recapitalisation of its banking sector and unveil a deal to hand control of two of the country’s healthy new banks to foreign creditors. The government will issue bonds worth IKr270bn next month to three new banks set up last year after the country’s three main banks fell victim to the global credit crunch.
The UK economy is set to shrink by 4.5% in this year, the biggest fall in a single year since 1945, according to an influential think-tank. The downbeat forecast is more pessimistic than the consensus view, and considerably worse than the 3.5% fall predicted by the government. The Ernst & Young Item Club also warned that hopes of economic recovery are "running ahead of reality".
CIT, the troubled American bank, has approved a US$3bn rescue loan from major shareholders to keep the company out of bankruptcy, reports say. The emergency financing is aimed at giving the firm time to restructure some of its debt payments, according to The New York Times and the Wall Street Journal.
Ghana is to get a US$600m three-year loan from the International Monetary Fund (IMF). It will also be able to draw up to US$450m from the IMF through a special facility - expanded after the G20 summit - to help poor countries.
Tesco, Britain’s biggest retailer, is considering seeking a separate credit rating for its financial services arm to give it more clout for its aggressive assault on banking.
17 July
JPMorgan Chase has become the second major US bank to report a big rise in profits for the April to June period. Net profit for the second quarter totalled US$2.72bn, an increase of 36% on the same period last year. Revenues at the company rose 41% to a record US$27.7bn. Its results come two days after rival Goldman Sachs reported a US$3.44bn second quarter profit.
UK government departments have amassed more than £20bn in underspends, the Treasury revealed, adding to the problem of public expenditure control over the next decade. The announcement of the totals built up under what is termed ‘end-year flexibility’ - money which departments have a right to spend - came on the same day when the International Monetary Fund’s (IMF’s) annual assessment of the economy confirmed its initial recommendation to bring forward more concrete and rapid plans to cut the £175bn deficit in the public finances this year.
Spain’s central bank has relaxed provisioning rules for lenders in a move that could help some banks avoid losses next year and allow others to strengthen their capital ratios. The Bank of Spain confirmed that it had advised all banks that they would no longer have to set aside the full value of high-risk mortgage loans - those for more than 80% of a property’s value - after two years of arrears. Instead, they would only have to provision for the difference between the value of the loan and that of 70% of the mortgaged property.
16 July
China’s economy accelerated significantly in the second quarter, with gross domestic product expanding by 7.9%, ahead of analysts’ consensus estimates. The surge in growth was driven by the government’s aggressively loose fiscal and monetary policies, introduced late last year, with most of the funding coming from record lending by state banks.
The Obama administration has unveiled draft legislation that will require all US hedge funds with more than US$30m in assets under management to register with the Securities and Exchange Commission (SEC) .
Russia’s economy shrank 10.1% in the first half of this year, the economy minister said, its worst decline since the early 1990s.
CIT faced the prospect of a bankruptcy filing or other restructuring as hopes of a government-led rescue plan for the troubled US middle-market lender were dashed. CIT has battled a liquidity crisis and faces US$1bn of debt maturing next month, but it is locked out of the wholesale funding markets. Thousands of small businesses depend on CIT for funding.
American Express has suspended its contributions to the pension scheme of its UK workforce. The US-based credit card company said it had stopped matching employee contributions to its pension scheme for the next 18 months, affecting some 6,000 British workers. The decision was part of a global cost-cutting initiative to save US$2.6bn, which was announced earlier this year and has included shrinking its workforce by 10%.
Citigroup is close to a secret agreement with one of its main regulators that will increase scrutiny of the US bank and force it to fix financial, managerial and governance issues. According to the Financial Times, people close to the situation said that the deal had been discussed in recent weeks amid increased pressure on Citi from the Federal Deposit Insurance Corporation, the regulator, and could be finalised soon.
15 July
Goldman Sachs has reported quarterly earnings of US$3.44bn on revenues of US$13.8bn. Combined with Goldman’s repayment of US$10bn in taxpayer funds last month, the strong showing - almost double its healthy returns for the first quarter - suggests that the investment bank has defied the downward trend as when many of its competitors will see profits trimmed by exposure to consumer-related write-downs.
The volume of goods leaving eurozone factories rose in May in the first pick-up since last August, although the upturn was weaker than expected and was accompanied by signals that German investors think any rebound there could be sluggish. Industrial production in the 16-member currency region rose 0.5% in May, although output was still 17% below the level seen the year before, the European Union’s statistics office said.
UK unemployment rose by a record 281,000 to 2.38 million, in the three months to May, the Office for National Statistics has said. The jobless rate increased to 7.6%, the highest in more than 10 years.
China's foreign exchange reserves, the world's largest, have surpassed US$2 trillion, the country's central bank has said. Currency reserves rose 17.8% from June 2008 to a record US$2.13 trillion. Its currency stockpile is twice the size of Japan's - the second-biggest holder.
Japan's central bank has downgraded its economic forecast for the current financial year, but has reiterated that the worst of the recession is over. The Bank of Japan now expects the economy to shrink 3.4% in the 12 months to 31 March 2010, a deeper contraction than its previous forecast of -3.1%.
14 July
The US budget deficit has moved above US$1 trillion for the first time - with three months of the financial year remaining, official data show. The government stepped up spending to counter the recession, and the bailout of financial institutions has taken a huge chunk out of government finances. Falling tax revenues and unemployment benefit spending have also contributed.
UK annual inflation fell in June as the Consumer Prices Index (CPI) dropped to 1.8% from 2.2% in May, the Office for National Statistics (ONS) said. It is the first time since September 2007 that the CPI is below the Bank of England's target of 2%.
Singapore appears to be emerging from its worst recession on record after the economy expanded at an annualised rate of 20.4% between April and June. It was the first quarterly expansion in a year, lifted by increased drug sales and construction activity, said the Ministry of Trade and Industry. However, the government still expects the economy to contract for the year.
13 July
The number of profit warnings by UK-listed firms fell in April-June to their lowest second quarter level since 2003, said accountants Ernst & Young (E&Y). There were 63 warnings issued by firms listed on the London Stock Exchange in the quarter, down 36% from a year ago. The decline may add to the growing feeling that the UK is nearing the bottom of the recession, E&Y said.
The firm set up to manage taxpayer stakes in nationalised banks has said it will be ‘challenging’ to return the investments to the private sector. UK Financial Investments (UKFI) was set up to manage a 70% stake in Royal Bank of Scotland and a 43.3% holding in Lloyds Banking Group. BBC business editor Robert Peston said these stakes were worth about £60bn. UKFI said the stakes currently showed a paper loss of £10.9bn, and it would take time to sell the shareholdings.
Boutique banks, which provide advice on mergers and acquisitions and restructurings, accounted for 14% of global M&A fees so far this year - the highest level since records began, according to Dealogic.
The US saw its deficit narrow to US$26bn in May, its lowest level in more than nine years, according to figures from the Commerce Department. Imports continued to fall while exports increased, pushing the deficit to its lowest level since November 1999.
7 July
The worst of the UK's recession is over, according to the British Chambers of Commerce (BCC) business group. A BCC report that surveyed 5,600 companies found that there had been 'welcome progress' in confidence levels between April and June 2009. However, the BCC still expects unemployment in the UK to reach 3.2 million by 2010.
China is trialling a scheme that allows trade with its neighbours to be settled with its own currency. Six Shanghai companies have signed contracts with counterparts in Hong Kong and Indonesia to settle deals in RMB.
Inflation in the Philippines fell to 1.5% in June - its lowest rate in 22 years - after energy prices fell, according to official figures.
2 July
Governments around the world have continued to push up trade barriers in spite of high-profile pledges at the G20 summit and other forums to resist protectionism, according to a World Trade Organisation (WTO) report. Over the past three months, the WTO recorded 83 trade-restricting measures undertaken by 24 countries and the European Union - more than double the number of trade-liberalising measures enacted during the same period. However, the report noted that the worst abuses had largely been contained.
Eurozone annual inflation has turned negative for the first time since records began in 1991. Consumer prices in the 16-country eurozone were 0.1% lower in June than the same month a year before, according to Eurostat, the European Union’s statistical office. The fall in prices reflects sharply lower energy costs and the effects of the region’s worst economic downturn since the second world war. Annual inflation is hugely undershooting the ECB’s target of ‘below but close’ to 2%.
Official figures confirmed the UK had suffered its worst slump in output for 50 years. Economists warned Britain would almost certainly have to wait at least two years before it regained the output lost over the past year. The figures showed a 2.4% quarter-on-quarter fall in gross domestic product for the first three months of 2009 - much sharper than the 1.9% initially calculated.
Japan's Shinsei Bank and Aozora Bank have agreed to merge to form the country's sixth largest bank, with assets of 18 trillion yen (US$186bn). Shinsei reported a loss of 143bn yen last year while Aozora lost 243bn yen. They have big US private equity shareholders: JC Flowers holds 33% of Shinsei and Cerberus Capital Management owns more than half of Aozora.
Malaysia has announced extensive economic liberalisation measures to attract foreign investments, including changes to its long-standing policy of giving preferential treatment in business to the country’s ethnic Malay majority.
Unemployment in the Irish Republic was 11.9% in June, the highest rate since April 1996, according to the Central Statistics Office. The number of people claiming jobless benefits has almost doubled in the past year to 418,592.
India's exports fell in May for the eighth month in a row. Exports in May were valued at 534.3bn rupees (US$11bn), down 29.2% from 655bn rupees a year earlier, government figures showed. Exports are a significant driver behind the Indian economy, making up about 15% of gross domestic product.
29 June
Japanese industrial output jumped 5.9% in May as car and electronics production recovered from a deep slump, but analysts said the outlook remained murky once the effects of government stimulus wear off. Manufacturers forecast a further 3.1% rise in June and a tepid 0.9% increase in July, but production is still 29.5% lower than a year ago.
Spain has launched a €9bn fund in case any of its troubled banks needs rescuing. Finance Minister Elena Salgado said the money could be used for capital injections, mergers or restructuring. She said the Fund for Ordered Bank Restructuring would start off with €9bn, but that the size of the fund could rise to €90bn.
Spiralling government debt around the world has prompted the creation of the first tradeable indices tracking the risks of countries defaulting. Markit, the data provider, has launched four indices of credit default swaps (CDSs) - used as insurance against bond defaults - as investors demand more information about the dangers of the growing debt mountain. These will run alongside CDS for individual countries, which are already traded.
26 June
The US economy continued to contract in the first quarter of this year, but at a slower pace than previously thought. Revised commerce department figures revealed that US gross domestic product (GDP) declined by an annualised rate of 5.5% in the first three months of the year. That was better than economists expected and a smaller contraction than the original estimate of a 6.1% contraction and last month’s estimate of a 5.7% decline.
Germany’s powerful export industry is warning of a credit squeeze in Europe’s largest economy even after the European Central Bank’s injection this week of one-year liquidity into the eurozone banking system. The German BGA exporters’ association forecast a ‘dramatic deterioration’ in credit conditions in coming months, which would result in ‘massive financing squeeze’.
Record levels of capital markets activity during the first six months of the year failed to lift the volume of worldwide mergers and acquisitions as chief executives remained cautious about launching big deals. Non-financial groups raised almost US$887bn in the bond markets in the first half, 64% more than the same period last year when US$540.3bn was raised, according to data from Dealogic.
AIG clinched a US$25bn debt for equity swap with the Federal Reserve that will give the authorities a large stake in two of the government-owned insurer’s most prized businesses. Under the agreement, the New York Fed will receive US$16bn in preferred equity in American International Assurance (AIA), AIG’s Asian arm, and US$9bn in preferred shares of American Life Assurance Company (Alico), an international life assurer. Once the deal closes this year, it will cut AIG’s US$40bn debt to the Fed by US$15bn. And it will reduce the size of its US$60bn available loan facility to US$35bn.
Ireland faces a deeper recession than any advanced economy, while the collapse of the property market and related financial stress in the banking sector will continue to be a drag on growth until at least 2014, the International Monetary Fund (IMF) said in its annual report on Ireland. The IMF said: “Only a modestly-paced recovery is foreseen.” Gross domestic product (GDP) is projected to contract by 13.5% in the three years to 2010, by which time unemployment will have reached 15.5%.
New Zealand’s economy shrank for a fifth straight quarter, confirming that the nation is in a prolonged and deep recession that has proven to be worse than expected. The economy contracted 2.7% in the January-March quarter compared with the same period in 2008 and 1% compared with the revised figures for the October-December period.
Prices in Japan fell by the most on record last month, raising fears of a new bout of deflation, official figures from the Ministry of Finance show. Consumer prices fell 1.1% in May from the same month a year ago, the most since records began in 1970. Prices of goods excluding fresh food also fell for the third straight month.
25 June
The European Central Bank (ECB) has pumped hundreds of billions of euros in one-year loans into the eurozone’s weakened banking system, making record amounts of emergency finance available in a bid to unlock credit markets and revive the region’s economies. The move came as the US Federal Reserve pushed back against expectations of an early rise in US interest rates. In a dramatic step dubbed ‘stimulus by stealth’ in financial markets, the ECB lent €442.2bn for 12 months to more than 1,100 banks at its current benchmark interest rate of 1%.
The Organisation for Economic Cooperation and Development (OECD) has revised down its forecast for the UK economy in 2009. It warns that the UK is in ‘a sharp recession’ with output set to contract by 4.3% in 2009, worse than its previous forecast of a 3.7% fall. The OECD predicts zero growth in the UK economy in 2010 and says the UK budget deficit will hit 14% of GDP next year.
US orders for long-lasting manufactured goods rose unexpectedly in May, figures show, raising hopes that the worst of the recession may now have passed. New orders for durable goods such as household appliances and aircraft rose 1.8% last month from April, according to the Commerce Department. Economists had expected orders to drop by 0.9%.
24 June
Japan’s exports continued to tumble in May, with even shipments to China showing little sign of improvement, suggesting that hopes for a quick recovery in global demand may be premature. Overall, Japanese exports fell 40.9% in May from a year earlier, more than the median market forecast for a 39.1% fall. On a seasonally adjusted basis, exports fell 0.3% in May from April.
Hypo Real Estate (HRE) is expecting further heavy losses in the second quarter. The German lender said its profits would be burdened by at least a ‘high three-digit million’-euro hit in the second quarter, caused by further risk provisions on real estate loans. HRE has lost €5.5bn amid the crisis in the real estate lending sector and has already received an almost €3bn equity injection from the German government this month.
The US is to make billions of dollars in cheap loans available to Ford, Nissan and Tesla, the California electric carmaker, so they can re-equip their plants to build a new generation of electric and other fuel-efficient vehicles. Ford will receive US$5.9bn, Japan’s Nissan US$1.6bn and Tesla US$465m from US$25bn of government money that was set aside in 2007 for a scheme known as the advanced technology vehicles manufacturing incentive programme.
23 June
The World Bank says the economies of developing countries are expected to grow by just 1.2% this year, compared with 5.9% in 2008 and 8.1% in 2007. And if China and India are excluded, gross domestic product (GDP) in developing countries is projected to fall by 1.6%. It also forecast the global economy as a whole would shrink by 2.9% this year, against an earlier prediction of 3%.
France’s budget deficit will widen to more than 7% of gross domestic product this year and next as tax receipts fall and unemployment rises, said Budget Minister Eric Woerth. Speaking on RTL radio, he said the deficit would come to between 7.0 and 7.5% of GDP in 2009 and 2010, more than twice the 3% ceiling laid down by European Union borrowing rules.
Every state-owned company that has listed in China since 2005 must transfer stock equal to 10% of the shares offered to the National Social Security Fund, according to a government edict. A similar requirement already covers listings of Chinese state-owned companies in Hong Kong and has made the state fund the largest institutional investor in the city’s stocks.
The Japanese government is ready to make an emergency loan to the country's biggest airline. Loss-making Japan Airlines (JAL) could receive up to 100bn yen (US$1bn) in state aid, say reports, on condition that the airline's management improves.
22 June
Firms in Germany, Europe's largest economy, are more confident now than they have been for seven months, according to a key index. The Ifo index climbed for the third month in a row to 85.9 in June from 84.2 in May - better than many analysts had been expecting.
National Australia Bank is to pay A$825m for UK insurer Aviva's Australian wealth management businesses Navigator.
18 June
The US government has announced a major reform of banking regulation to prevent future financial crises. The overhaul will require big banks to put more money aside against future losses to curb excessive risk taking. Consumers will get a special agency to protect their interests and regulate mortgages and credit cards. The US central bank, the Federal Reserve, will be given the authority to monitor major financial institutions.
Italy’s economy, the eurozone’s third largest, might emerge from recession earlier than expected, the Organisation for Economic Co-operation and Development (OECD) forecast. The OECD said in a survey on Italy that it had raised its gross domestic product growth forecast for 2010 to 0.4% from a previously estimated 0.4% contraction. But at the same time its outlook for 2009 worsened, with a 5.3% contraction forecast against the last outlook, published in March, of a 4.3% drop. Italy’s GDP shrank 1% last year as it began its worst post-war recession.
China’s fiscal stimulus package would help the country’s economy grow faster than expected this year but it would be premature to say a sustained recovery was under way, the World Bank said. The World Bank raised its year-on-year gross domestic product growth forecast for China to 7.2% for 2009, saying the apparent success of the government’s Rmb4,000bn (US$586bn) rescue package had improved the economy’s outlook since March, when the bank predicted 6.5% growth this year. It warned, however, that Beijing might have little room for more stimulus measures.
Inflation in India has turned negative for the first time in more than 30 years, official figures have shown. Wholesale prices fell 1.61% in the year to 6 June, compared with a rise of 0.13% the previous week, the Ministry of Commerce and Industry said.
17 June
The US economy should emerge from recession by the late summer, according to economists from some of the country's top banks. The American Bankers Association's Economic Advisory Committee has said it expects economic activity to increase by 0.5% between July and September.
China has introduced an explicit ‘Buy Chinese’ policy as part of its economic stimulus programme in a move that will increase the likelihood of protectionism around the world.
UK inflation in May remained higher than most economists had expected, signalling that the Bank of England’s room for further easing of monetary policy may be limited. Consumer price inflation fell from 2.3% in April to 2.2% last month, compared with the average forecast by economists of a 2% fall.
UK unemployment rose to 2.261 million in the three months to April, the highest since November 1996, the Office for National Statistics said.
Air Canada, the country’s largest airline, has asked the Canadian government for a loan of at least C$200m (US$176m) as it attempts to meet capital requirements to stay in business.
16 June
Eurozone banks face additional losses of more than US$283bn this year and next as continental Europe’s severe recession intensifies strains on its financial sector, the European Central Bank (ECB) has warned.
The International Monetary Fund (IMF) has said the US economy will recover more strongly and more quickly, than it previously thought. It now believes that the world's largest economy will grow by 0.75% next year, rather than the 0% it forecast earlier this year.
The Bank of Japan (BOJ) has said the Japanese economy has begun to stop deteriorating, but it has still kept interest rates unchanged at 0.1%.
15 June
The world's largest economies are beginning to stabilise but still face major risks amid an ongoing global recession, G8 finance ministers say. At a meeting in Italy of G8 nations, the ministers said stock markets were rising, interest rates more stable, and consumer confidence was returning. However, US Treasury chief Tim Geithner led warnings that it was too early to wind down economic stimulus packages.
The UK economy is stabilising but it will not be until early next year that a ‘slow and gradual’ recovery will begin, business leaders have said. The economy will contract by 3.9% over 2009 before seeing a return to growth of 0.7% next year, the Confederation of British Industry (CBI) predicted.
For the first time the Hong Kong Exchanges and Clearing (HKEx) and Brazil’s BM&F Bovespa have overtaken NYSE Euronext, Nasdaq OMX and the London Stock Exchange in the value of shares in the exchange companies themselves. HKEx is now the world’s second-largest exchange by market value, behind CME Group, the largest US futures exchange. BM&F Bovespa is in fourth place, after Deutsche Börse, the German exchange. The LSE has slipped to 10th place.
11 June
The European Central Bank stepped in to help avert a Baltic financial crisis by lending €3bn to the central bank in Sweden, whose banks dominate the region’s financial sector.
JPMorgan Chase, Morgan Stanley, Goldman Sachs and seven other large financial institutions were granted permission to repay the government US$68bn they received through the Troubled Asset Relief Programme (TARP). Repayment of the rescue funds will allow the banks to get out from under federal restrictions placed on them through their participation in TARP.
German exports in April were 4.8% lower than in March, and 28.7% down on a year earlier, official figures show - the steepest annual fall since records began in 1950. Separately, the economics ministry reported industrial production down by 1.9% in April compared with March.
Japan's economy shrank less than previously thought in the first three months of the year, but still contracted at a record pace. Gross domestic product (GDP) shrank by 3.8%, equivalent to 14.2% over a year.
Chinese exports have dropped by a record amount in May as demand for its goods from the US and Europe slumped. Exports fell 26.4% from the same month earlier, more than February's previous record drop. As the downturn has also affected China, and its imports have also declined. They dropped by 25.2% in May.
9 June
BlackRock looks set to seal the acquisition of Barclays Global Investors and become the world’s biggest money manager, according to the Financial Times. The US group plans to pay Barclays $12bn-$13bn (£7.5bn-£8.1bn) for BGI - half in cash and half in shares - to create a group with more than $3,000bn in assets under management, half as much again as nearest rivals such as State Street, Allianz and Fidelity.
Lloyds Banking Group is to close all 164 branches of Cheltenham & Gloucester, risking up to 1,500 jobs.
8 June
The pace of decline of the world's major economies is slowing, according to the Organisation for Economic Co-operation and Development (OECD). The composite leading indicators (CLI) index for the 30 countries in the OECD rose 0.5 points in April, but was still 8.3 points lower than April 2008.
Fresh figures on the UK construction industry could mean the UK economy shrank more than first thought in the first three months of 2009. The Office for National Statistics said that construction output fell by 9% in the first quarter, much more than an initial estimate of 2.4%.
5 June
Industrial and Commercial Bank of China, the world’s largest bank by market value, said it would purchase 70% of Bank of East Asia’s Canadian unit, as it takes steps to expand overseas.
The Bank of England's interest rate setters have kept the cost of borrowing unchanged at 0.5% for the third month in a row.
3 June
BBVA, Spain’s second-biggest bank, is hoping that at least some of its 29,954 Spanish employees will agree not to come to work for up to five years - in exchange for nearly a third of their usual salary and a guaranteed job when they return.
The UK financial services watchdog has roughly doubled its fees for the biggest retail and investment banks, an even greater increase than expected, after bowing to pressure from small financial advisers for less swingeing rises. The Financial Services Authority (FAS) is lifting the overall cost of policing the industry by 35.8% to £435.5m.
Australia has defied international trends to record a 0.4% rise in gross domestic product for the first quarter compared to the same period last year, with economic growth salvaged by strong exports, robust retail sales and the government’s fiscal stimulus measures.
Lloyds Banking Group plans to shed 530 jobs and close one site in the UK. All jobs will go before year-end. Some 210 people will lose their jobs when a customer service unit in Kent in closed, of which 190 are full-time positions, the bank said.
2 June
Shares in Barclays tumbled after one of its largest Middle Eastern shareholders announced plans to offload its stake in the British bank, pocketing a large profit less than seven months after making its £3.5bn investment. International Petroleum Investment Corp, an investment vehicle of the Abu Dhabi royal family, was finalising a placing of 1.3bn Barclays shares with institutional investors. The group also invited offers for its entire £1.5bn holding of Barclays capital notes in a process that will be completed by Wednesday. Both sales are being handled by Credit Suisse.
Goldman Sachs sold up to US$1.9bn worth of shares in Industrial and Commercial Bank of China (ICBC), in the latest divestment of stock in a mainland China lender.
Switzerland has entered recession after official figures showed that the country's economy shrank by 0.8% in the first three months of 2009. The decline came after a contraction of 0.3% in the last quarter of 2008.
US consumer spending fell for the second month in a row in April, despite an increase in personal income, official data has shown. Consumer spending dipped 0.1%, compared with a revised fall of 0.3% in March, the Commerce Department said.
Factory production in the eurozone shrank more slowly in May than expected, according to a survey by Markit. The Markit Eurozone Manufacturing Purchasing Managers Index had a better-than-expected reading of 40.7, marking its highest level in seven months. The rise from April's reading of 36.8 was the largest monthly increase in the survey's 12-year history.
1 June
The US economy shrank in the first three months of 2009 at a slower pace than had originally been estimated by the Commerce Department. Gross domestic product (GDP) declined by an annual rate of 5.7% in the first quarter, less than the 6.1% that had been estimated in April.
General Motors will file for Chapter 11 protection in the biggest ever bankruptcy of an industrial company, tapping an additional US$30bn in government financing.
Germany approved a last-minute deal to keep Opel, GM’s European arm that includes Vauxhall, afloat, agreeing €1.5bn of bridge financing while the US group negotiates a stake sale to Magna International, the Canadian auto group, and Sberbank, a Russian bank.
29 May
Standard and Poor's downgraded its view of the UK to ‘negative’ from ‘stable’ for the first time since it started analysing its public finances in 1978. It said the UK's finances were deteriorating faster than expected. The change came as data confirmed that new government borrowing has soared, to a record of almost £8.5bn in April.
General Motors and the US Treasury have improved the offer to GM's bondholders, as they prepare for the firm's move into bankruptcy protection. Bondholders with US$27bn of GM debt are now being offered the option to buy an extra 15% of GM shares as part of a proposed bankruptcy deal. This is on top of the 10% they had previously been offered.
Japan's factory output has jumped at its fastest rate in more than 50 years, but higher unemployment figures have dampened hope of an early recovery. Output rose by 5.2% in April from the previous month, the biggest monthly gain since 1953, official figures show. The jobless rate hit 5% in April, up from 4.8% in March.
India's economy grew 5.8% in the first three months of the year compared with the same period last year, which was better than had been expected. The official gross domestic product figure was down from 8.6% annual growth seen in the first quarter of 2008.
28 May
German inflation has turned negative for the first time in more than 20 years, fuelling fears of a fall in prices across the eurozone that will add to pressures facing the European Central Bank as it grapples with Europe’s severe recession. Consumer prices in Germany fell 0.1% this month from a year ago on a European harmonised basis, the country’s statistical office said. The unexpected drop was the first negative annual inflation rate since comparable records began in 1996 and since March 1987 on the previous basis.
The Swedish krona fell sharply as the country’s central bank warned that the worst of the financial crisis may not be over. The Riksbank said it was raising foreign currency to boost its US$22bn currency reserves. Over the past year, Sweden’s currency reserves have declined by US$6bn as the Riksbank monetised reserves to provide currency liquidity to its domestic banks, which have high levels of exposure to the slowdown in the Baltic region.
27 May
The South African economy has gone into recession for the first time since 1992, following a sharp slowdown in the manufacturing and mining sectors. Africa's biggest economy contracted at an annualised rate of 6.4% between January and March, compared with the same period a year earlier. It was the biggest decline since 1984 and followed an annualised 1.8% fall in the previous three months.
Russia's economy contracted sharply in April - shrinking by 10.5% from the same month a year ago - Deputy Economy Minister Andrei Klepach has said. The data came as officials were quoted as saying Russia would have a budget deficit equivalent to 9% of GDP in 2009, from an earlier 7.4% prediction.
26 May
Confidence among UK business professionals has risen for the first time since the end of 2007, a survey indicates. The Institute of Chartered Accountants' index of business confidence rose to -28.2 at the end of March, from -45.3 at the end of the previous quarter.
Japan's central bank has upgraded its economic outlook, saying the worst of the recession might be over. The move came after the bank's two-day policy meeting, at which it opted to keep interest rates on hold at 0.1%.
Firms in Germany, Europe's largest economy, are more confident now than they have been for six months, according to a key index. The Ifo index climbed for the second month in a row to 84.2 in May from a reading of 83.7 in April.
Australia’s securities regulator lifted its eight-month ban on covered short selling of financial stocks, bringing the country into line with all major developed markets that had already lifted their temporary bans on the practice.
Malaysia is preparing to announce the onset of its first recession for 11 years amid growing concern about the depth of the slowdown and the likely timing of a recovery. Malaysia’s exports fell 20% in the first quarter compared with the same three months of 2008, although the rate of decline appears to be on a moderating trend. Exports fell 15.6% year on year in March compared with 28% in January.
Australians are getting bonus payments worth US$700 (£440) - the largest cash handouts in the country's history. The payments, aimed at protecting a flagging economy from the worst effects of a recession, will cost the government a total of US$33bn.
22 May
A group including such big investors as Blackstone, Carlyle, Centerbridge and WLRoss won an auction for BankUnited after the Florida lender - worth nearly US$13bn by assets - was closed by federal regulators in the biggest US bank failure of 2009.
GMAC, the automotive financing company, received US$7.5bn of government aid, allowing it to stay in business and offer loans to buyers of Chrysler vehicles. The investment comes before the June 1 deadline for General Motors to complete a restructuring or file for bankruptcy and could result in the government owning a majority stake in both the carmaker and its main financing company.
Eurozone prospects brightened this month with the pace of economic contraction slowing markedly, according to a survey by Markit, which will boost hopes of the region’s recession ending this year. Purchasing managers’ indices for the 16-country region jumped more than expected in May to the highest for eight months. Although they still indicated economic activity was contracting, the rate of decline fell for a third consecutive month. The improvement in Germany, the eurozone’s largest economy, was particularly sharp.
The output of the UK economy fell by an unrevised 1.9% in the first three months of 2009, revised figures from the Office of National Statistics show. But spending by households fell by 1.2%, the biggest drop since 1980. The figures suggest the decline in manufacturing output was less steep than previously thought, down 5.5% rather than the earlier figure of 6.2%. On a year-on-year basis, the UK economy is 4.1% smaller than it was in the first quarter of 2008.
UK car production fell 55.3% in April, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
21 May
UK’s government borrowing rose sharply in April, the Office for National Statistics (ONS) said. Public sector net borrowing rose to £8.46bn this April compared to £1.84bn in the same month last year.
The US dollar weakened against the pound after Federal Reserve minutes showed it considered adding to money supplies, easing concerns over dollar funding. One pound was worth US$1.5817, its highest since November, before later falling to US$1.577.
Japanese electronics firm Sony plans to halve the number of its suppliers and reduce purchasing costs by 20% over two years, as part of restructuring plans. Cutting procurement costs is aimed at saving 500bn yen (US$5.3bn).
20 May
Japan's economy shrank a record 4% in the first quarter as companies slashed investment and exports. This is the quickest drop since records began in 1955.
Venezuela's economy grew at its slowest rate in five years during the first quarter, as the country felt the effect of falling oil prices. In the first three months of the year output rose 0.3% from the same period a year earlier, the slowest level since 2003, the central bank said. Compared to the previous quarter the economy shrank by 16.4%.
19 May
UK annual inflation slowed in April as consumers' energy and food bills continued to drop, figures show. The Consumer Prices Index (CPI) fell to 2.3% from 2.9% in March, the Office for National Statistics (ONS) said.
American Express is cutting about 4,000 jobs - approximately 6% of its global workforce - as part of a plan to save US$800m (£521.6m).
18 May
Small and medium-sized US banks must raise some US$24bn to meet the capital standards set by the government in its stress tests of large institutions, research for the Financial Times shows. News of the potential capital shortfall could increase pressure on many of the 7,900 US banks that form the backbone of the US financial system. As many as 500 more banks could close, according to investment bank Sandler O’Neill, which carried out the research.
Shares in Lloyds Banking Group have risen 6% following chairman Sir Victor Blank's announcement he would be stepping down by June next year.
General Motors (GM) has announced plans to close up to 1,100 of its dealerships in the US as it desperately tries to cut costs and stave off bankruptcy.
The European Bank for Reconstruction and Development (EBRD) says it aims to invest a record €7bn in 2009 to tackle the slowdown.
15 May
The economies of the 16 countries that make up the eurozone declined by 2.5% in the first three months of 2009, the EU's statistics agency Eurostat said. A sharp fall in German exports was a key factor in the decline.
The three biggest banks in Italy - UniCredit, Intesa Sanpaolo and Generali - are profitable and relatively optimistic about their prospects for the rest of the year, according to first-quarter figures. The three companies saw income and profits substantially lower than a year ago, but other measures of financial health improved, including tier 1 capital ratios for Intesa and UniCredit.
Temasek Holdings, the Singapore state investment company, disclosed that it sold its entire 3.8% stake in Bank of America in the first quarter of 2009, bringing to an end its unprofitable investment in the US financial group after little more than a year.
Crédit Agricole, France’s second-biggest bank, reported a 77% fall in net profit in the first quarter from the same period last year, after more than doubling its loan-loss provisions to €1.1bn. Net profit of €202m in the first three months to the end of March underperformed consensus expectations of €350m profit after losses in its investment banking and international retail businesses.
Singapore Airlines, the world’s biggest carrier by market value, warned that the recent outbreak of swine flu could delay a recovery in air travel as it reported a 92% drop in quarterly earnings.
The number of homes repossessed in the UK rose to 12,800 in the first three months of the year, the Council of Mortgage Lenders (CML) has said. This was up 23% from the 10,400 in the previous three months and 50% up on the 8,500 in the same period last year.
14 May
Spain's economy suffered its largest contraction in 50 years in the first three months of 2009, preliminary estimates have shown. GDP fell 1.8% from the previous quarter and was down 2.9% year-on-year, the National Statistics Institute said.
Electronics giant Sony has reported its first annual loss in 14 years, after being hit by a big drop in sales. Sony reported a loss of 98.9bn yen (£685m) for the year to the end of March, compared with a profit of 369.4bn yen the previous year.
Dexia, the Franco-Belgian bank bailed out by three countries last year, said it was “on the mend” as it reported a profitable first quarter after net losses of €3.3bn in 2008. The bank, which is the world’s largest lender to local authorities, reported net profits of €251m in the three months to the end of March. This was 13% lower than in the same period last year but higher than expectations of €90m.
Allianz announced a 97% fall in first-quarter net profits as Europe’s biggest insurer drew a line under its misadventure with Dresdner Bank. Losses at Dresdner, sold to Commerzbank during the first quarter after seven years of ownership by Allianz, helped to depress net income at its former parent to just €29m, compared with €1.2bn in the first quarter a year ago.
Freddie Mac said it would draw US$6.1bn of capital from the US Treasury after a US$9.9bn first-quarter loss drove its net worth below zero.
Europe should follow the US in conducting stress tests on individual banks, the International Monetary Fund said as it warned that economic recovery in the region next year depended on bolder and more forceful policy action.
The German cabinet has agreed a ‘bad bank’ scheme, to enable the country's lenders to remove remaining toxic assets from their balance sheets. Under the plan, the banks will be able to swap their toxic debt for government-backed bonds, in return for paying an annual fee.
European Central Bank president Jean-Claude Trichet signalled that the global downturn had bottomed out with some large economies already able to put the recession behind them and look forward to renewed growth. His remarks came as the Organisation for Economic Co-operation and Development (OECD) said there were signs of a ‘pause’ in the economic slowdown in France, Italy, the UK and China.
Goldman Sachs has agreed to a US$60m settlement to resolve claims by a Massachusetts regulator that it participated in unfair and deceptive lending practices involving subprime mortgages.
11 May
Royal Bank of Scotland (RBS) has said it is preparing for two "very tough" years, after announcing a loss for the first three months of 2009. The bank reported a pre-tax loss of £44m, compared with a profit of £479m for the same period a year earlier. Despite a good performance from its investment banking division, it was hit by losses of about £5bn on loans and investments that have gone bad. RBS, which is 70%-owned by taxpayers, also warned of more job cuts to come.
US bank Wells Fargo has said it plans to raise US$7.5bn from selling new shares, a day after the US Treasury said 10 banks needed to boost reserves. Morgan Stanley is also hoping to raise US$3.5bn from share sales. Bank of America said it planned to sell assets and raise capital to secure the US$33.9bn it needs.
France and Italy both saw much larger than forecasted falls in industrial output in March. French output was down 1.4% on the previous month, said national statistics office INSEE. Economists had predicted a decline of only 0.5%. Meanwhile monthly production in Italy fell for the 11th month in a row, down 4.6% on February's output. Analysts had expected a monthly drop of 1.6%.
China's consumer prices fell by 1.5% in the year to April, which is the third consecutive month of decline.
8 May
European central banks unveiled bolder-than-expected moves to buy assets and boost growth through historically-low interest rates. The European Central Bank cut its main interest rate by a quarter percentage point to 1%, the lowest yet, and announced plans to buy €60bn of covered bonds, which are backed by mortgage or public sector loans. Separately, the Bank of England said it would pump a further £50bn (€56bn) into the UK economy through its programme of ‘quantitative easing’.
US regulators ordered 10 of the nation’s largest banks to add a total of US$74.6bn in equity following the completion of stress tests, triggering a frenzy of activity as banks lined up to announce capital-raising plans. The US authorities said that the tests projected that losses at the top 19 banks over 2009 and 2010 would reach US$599bn if the adverse scenario set out in the stress test materialised.
Taiwan’s exports in April fell 34% from a year ago to US$14.9bn, the eighth consecutive month of decline and steeper than the 28.2% consensus forecast of economists polled by Reuters.
Nasdaq OMX Group reported a 22% decline in first-quarter profit as rivals continued to cut into its market share in US equity trading. The exchange group reported earnings of US$94m, or 44 cents per share, compared with US$121m, or 69 cents per share, in the same quarter last year.
7 May
US financial stocks soared as investors expressed relief that the capital shortfalls identified by the government’s ‘stress tests’ at 19 large banks were not as big as some had feared. Citi and Bank of America emerged as the banks with the biggest capital shortfalls, with Citi’s equity needs projected to be more than US$50bn and BofA requiring about US$34bn in fresh equity, while JPMorgan Chase, Goldman Sachs and American Express are among those that will not need additional capital.
Barclays Bank has announced a rise in profits in the first three months of this year despite the ongoing financial crisis. Profits before tax came in at £1.37bn, up by 15% compared with the same period last year. Total income almost doubled to a record £8.15bn because of strong performance at the group's investment banking arm.
Commerzbank is to divest its Eurohypo property finance subsidiary as part of a deal with European competition authorities to compensate for the €18.2bn of state aid given to Germany’s second largest bank.
Volkswagen and Porsche announce plans to merge.
UBS’s core Swiss and international wealth management businesses are to bear the brunt of the job losses that should help the Swiss group save SFr4bn (US$3.5bn) a year by the end of 2010. Some 4,000 jobs will go in the wealth management and Swiss bank division, the group’s biggest unit, and 2,500 in wealth management for the Americas. Together, the cuts will account for about 65% of the bank’s 10,000 planned job losses.
5 May
The German government has issued an ultimatum to the country’s seven Landesbanken to agree by July to consolidate the troubled state-owned banking sector or face exclusion from Berlin’s plan to take toxic assets off banks’ books. Government officials told the Financial Times that four of the banks held so many troubled assets that it was “impossible” to see how their owners - German regional governments and municipal savings banks - could save them without Berlin’s help.
Japan has offered US$100bn in financial assistance to Asian countries hit by the global financial crisis. Tokyo announced at a meeting of the finance ministers of the 10 countries of the Association of South-East Asian Nations in Indonesia that it would set up a Y6,000bn (US$61.5bn) bilateral currency swap scheme , on top of a US$38.4bn commitment to the multilateral Chiang Mai initiative. The Chiang Mai deal, a $120bn currency scheme that has been under discussion for years, was formally agreed by the Asean countries at a meeting with the finance ministers of Japan, China and South Korea.
Switzerland's biggest bank, UBS, has confirmed it made a 2bn Swiss francs (£1.2bn) loss during the January to March quarter.
1 May
Chrysler filed for Chapter 11 bankruptcy protection after US President Barack Obama criticised hedge funds for blocking an out-of-court restructuring of the US carmaker’s US$6.9bn debt.
The number of people being declared bankrupt in England and Wales has hit a new record, according to the government's Insolvency Service. In the first three months of the year there were a record 19,062 bankruptcies and 10,713 individual voluntary arrangements (IVAs).
Unemployment across the 27 EU member states reached 20 million in March.
New Zealand’s central bank has forecasted interest rates will remain at record lows until the ‘latter part of 2010’ as it cut its official cash rate by 50 basis points to a record 2.5%.
30 April
The US economy continued to contract in the first quarter of 2009, led by the biggest fall in exports for 40 years. US GDP contracted at an annualised rate of 6.1% during the quarter, little improvement on the 6.3% fall in the last three months of 2008. Exports fell by 30%, the Commerce Department said, as the global recession hit worldwide spending. Separately, the Federal Reserve held interest rates at near zero and said the recession in the US may be easing.
Industrial output in Japan rose in March for the first time in six months, according to government figures. Production rose by 1.6% in March compared with February, after months of decline.
The German government says the country's economy will shrink 6% this year, in a dramatic revision to its earlier forecast of a 2.25% decline. It would be by far the worst post-war performance of the German economy, as the biggest previous decline was 0.8% in 1993, just after re-unification.
29 April
Lithuania’s economy shrank by 12.6% in the first quarter compared with the same period of 2008 - the largest year-on-year fall in the EU since the recession began.
Shareholders in Fortis booed, threw shoes and walked out of its general meeting in Ghent as they called for the company's executives to resign.
28 April
US taxpayers would take a majority shareholding in General Motors under a sweeping debt-for-equity restructuring proposal that the carmaker revealed in a bid to avoid bankruptcy. Under the plan, GM said it would shut 13 of 47 plants by the end of next year, resulting in an additional 7,000 job losses. The latest job cuts would reduce GM’s US workforce from 61,000 last year to about 40,000 by the end of 2010.
National Australia Bank, the country’s largest lender, announced net profits fell 1% to A$2.66bn in the six months ended March, while cash earnings fell 9% to A$2bn.
Global shares have fallen further as the swine flu outbreak continues to weigh on markets. The UK's FTSE 100 index was down 1.4% in early trading, while Japan's Nikkei earlier closed down 1.7% and Hong Kong's Hang Seng shed 1.4%. The declines come after the Dow Jones index lost 0.6% in New York. "We had finally begun to see a bottom for the global economy and that has been ruined by pigs," said analyst Tsuyoshi Segawa of Shinko Securities.
27 April
Japan’s government cut its forecast for the economy, predicting that it will shrink 3.3% in the year to next March instead of its previous estimate of zero growth, as the world’s second largest economy remains in the grip of the worst recession since World War II.
24 April
Microsoft’s revenues fell for the first time in its 34-year history by 6% in the latest quarter to US$13.65bn, some US$500m below Wall Street’s expectations.
United Parcel Service’s (UPS) quarterly net income fell by 56%, dropping to US$401m in the first quarter of 2009 from US$906m a year earlier. Revenues fell 13.7% to US$10.9bn from US$12.7bn a year before.
Mizuho Financial Group, Japan’s second largest bank, warned it would report a full-year loss of Y580bn (US$5.9bn) rather than a profit of Y100bn in the year to March 2009.
22 April
UK Chancellor Alistair Darling has said the UK will have to borrow a record £175bn as he admitted the economy faces its worst year since the second world war.
The global economy is set to decline by 1.3% in 2009, in the first global recession since second world war, the International Monetary Fund (IMF) said. In January, the IMF had predicted world output would increase by 0.5% in 2009. It now projects that the UK will see its economy shrink by 4.1% in 2009, and by a further 0.4% in 2010. But other major economies are predicted to shrink even more, with Germany declining by 5.6%, Japan by 6.2%, and Italy by 4.4% in 2009.
Japan is to issue an extra Y10,800bn (US$110bn) of government bonds this fiscal year to help it tackle its worst recession since the second world war. The bonds will fund the bulk of the government’s stimulus plan and will bring its expected total new issuance for the fiscal year starting this month to a record Y44,100bn, a 33% rise on last year.
Sweden’s central bank halved its key interest rate to a record low of 0.5% and forecast that the country’s open economy would this year suffer its worst recession since 1940.
A series of interest rate cuts in India has failed to lead to cheaper commercial lending, leaving Asia’s third largest economy to grow at only 6% this year, the central bank said. The Reserve Bank of India (RBI) issued the first official growth forecast under 7% and cut its key repo lending rate by 25 basis points to 4.75%.
The deteriorating global economy means financial institutions now face total losses of USS$4.1 trillion on loans and other assets, the International Monetary Fund (IMF) said in its Global Financial Stability Report, urging governments to take ‘bolder steps’ to shore up institutions - including nationalising them where necessary.
21 April
UBS’s new management took a first step to trimming the balance sheet and redeploying capital with the US$2.5bn sale of Pactual, the Swiss banking group’s Brazilian financial services operations, to some of its founders.
UK annual inflation measured by the Retail Prices Index (RPI) went negative in March for the first time since 1960, to -0.4%, down from zero in February. The Consumer Prices Index (CPI), fell in March to 2.9% after February's unexpected rise to 3.2%, the Office for National Statistics (ONS) said.
The supermarket chain Tesco has reported underlying annual pre-tax profits of £3.13bn, an improvement of 10% on the previous year.
General Electric reported a 35% fall in quarterly profit. Profit in the first three months of 2009 slid to US$2.8bn from US$4.4bn a year earlier.
20 April
UK Chancellor Alistair Darling has decided to concede for the first time that the government will not recoup the full costs of its banking interventions and that the bill could be as high as £60bn. The provision for banking losses will come in a Budget likely to be dominated by forecasts of huge public borrowing, with the Treasury expected to project a peak deficit of £170bn-£180bn.
The International Monetary Fund (IMF) has formally approved a US$47bn line of credit for Mexico.
First-quarter profits at JPMorgan Chase have come in ahead of expectations, despite falling 12.5% from a year ago to US$2.1bn. The group's investment bank reported a profit of US$1.6bn, and the forecast-beating results sent its shares up 2.6% on Wall Street.
16 April
China’s economy grew 6.1% in the first quarter, the lowest year-on-year reading since quarterly GDP data was first published in 1992. The increase was down from 6.8% in the fourth quarter and 9% for the whole of 2008.
Prices in the US fell in the year to March, marking the first annual decline since 1955. Consumer prices fell 0.4% over the year to March, the labour department said, and dipped 0.1% last month from February owing to weak energy and food prices.
AIG is in advanced talks to sell its US personal lines insurance business to Zurich Financial Services for about US$2bn.
The rump of the bankrupt bank Lehman Brothers is sitting on a stockpile of 450,000 lb of uranium "yellowcake”, according to the Guardian.
15 April
Swiss bank UBS says it will axe 8700 jobs around the world in a bid to cut costs after posting a loss of around US$1.75bn for the first quarter.
Poland's government is to ask the International Monetary Fund (IMF) for a US$20bn credit line to help tackle the economic crisis.
Fortis Bank has seen a €20.6bn loss for 2008 following write-downs on debt and the division of the business.
14 April
Goldman Sachs has reported a US$1.8bn net quarterly profit, beating analyst expectations. The bank also said it would place US$5bn worth of its stock on the market, to raise funds to repay an emergency US$10bn loan provided by the US government.
ING has unveiled a ‘back to basics’ strategy that will sell 10 to 15 businesses worth up to €8bn and focus its lending activities on Europe.
Bankruptcy-related mergers and acquisitions have hit their highest level globally since August 2004, and are set to keep rising as more companies are forced into distressed sales, according to Thomson Reuters data and restructuring practitioners. Thomson Reuters identified 34 announced deals in March alone, and 67 so far this year, where the target company was in bankruptcy or administration proceedings. The vast majority were in the US or Japan.
The credit quality of global companies has deteriorated to levels not seen for more than a quarter of a century, according to Moody’s Investors Service. The ratings agency said the ratio of companies having their credit ratings cut versus the number of companies being upgraded - an indicator of declining credit quality - had reached its highest level since 1983.
Wells Fargo lifted hopes for the banking sector by announcing that it would report record first-quarter profits of US$3bn later this month.
9 April
Ireland’s finance minister Brian Lenihan outlined plans to set up a national asset management agency to take over an estimated €80bn-€90bn of bad loans extended by local domestic banks to developers and property companies that now look as if they will not be able to repay.
Royal Bank of Scotland is cutting up to 9,000 jobs worldwide in areas such as technology and call centres in what is the biggest single job cull at a bank this year.
7 April
The Reserve Bank of Australia cut its benchmark rate by a quarter percentage point to 3%, a 49-year low.
UK car sales fell by 30.5% in March, compared with the same month last year, the latest industry figures have shown.
The UK government may have to find an extra £39bn a year by 2016 to bring borrowing under control, the Institute for Fiscal Studies (IFS) said. This is on top of the £38bn of fiscal tightening the chancellor announced in the pre-Budget report (PBR).
Japan is to implement another fiscal stimulus plan of more than 10 trillion yen (£66bn) to fight the recession. It comes on top of 12 trillion yen of stimulus spending that has already been agreed. The new sum amounts to more than 2% of the annual output of Japan's economy.
2 April
Meeting in London, the G20 reached an agreement to tackle the global financial crisis with measures worth US$1 trillion (£681bn). The International Monetary Fund (IMF) will receive an extra US$750bn to help nations that have been particularly hard hit. The G20 has pledged around US$250bn to boost global trade. Speaking on behalf of the G20, UK Prime Minister Gordon Brown announced the following steps:
• Bankers' pay and bonuses will be subject to stricter controls.
• A new Financial Stability Board will be set up to work with the IMF to ensure co-operation across borders.
• There will be greater regulation of hedge funds and credit ratings agencies.
• A common approach to cleaning up banks' toxic assets.
• The world's poorest countries will receive US$50bn in aid.
31 March
The World Bank says the world economy will contract by 1.7% this year, the first decline since World War II. The bank says that the world's richest countries will contract by 3%, while world trade will fall by 6.8%. Developing countries will grow by 2.1%, half the forecast six months ago, and some areas will fall into recession.
One in 10 workers in advanced economies will be without a job next year, said Angel Gurría, the head of the Organisation for Economic Co-operation and Development (OECD).
30 March
Companies borrowed US$1,500bn in the bond markets during the first quarter of 2009, but global merger and acquisition (M&A) activity slumped 36% year-on-year, reports the Financial Times. M&A has collapsed in the UK to just US$14.6bn, excluding government activity, according to Dealogic - the lowest level since its records began in 1995.
The White House has pushed out the chairman of General Motors, Rick Wagoner, and instructed Chrysler to form a partnership with the Italian automaker Fiat within 30 days as conditions for receiving another much-needed round of government aid.
Germany makes €60m capital investment in Hypo Real Estate (HRE), subscribing to new shares that give it an 8.7% stake in the property lender.
The Spanish government and the Bank of Spain began the country’s first bank rescue in this financial crisis, providing up to €9bn in liquidity to Caja Castilla La Mancha, a savings and loans institution, and replacing its directors with central bank nominees.
The Nationwide is to buy the Dunfermline Building Society's branches, good loans and deposits. The mutual was put up for sale after incurring losses of £26m. The Treasury will take £1bn of commercial property lending and acquired mortgage debt.
27 March
The US economy shrank in the fourth quarter at its fastest rate since 1982, showed revised official figures, as corporate profits fell at the sharpest pace in 55 years and jobless claims continued to climb. Updated commerce department data showed US gross domestic product contracting at an annualised rate of 6.3%.
The UK economy shrank even more than expected in the last three months of 2008, official figures show. The Office for National Statistics said the economy shrank by 1.6% compared to the third quarter, the most since 1980 and more than an earlier 1.5% estimate.
26 March
Romania became the latest eastern European country to seek external financial support, with the announcement of a €20bn International Monetary Fund (IMF)-led financing package to help steer the country through the economic crisis. In return for the funds the country must bring its budget deficit below 3% of gross domestic product by 2011. The IMF will lend the country €12.95bn with further support coming in the form of €5bn from the European Union, €1bn from the World Bank, and up to €1bn from multilateral institutions including the European Bank for Reconstruction and Development (EBRD).
Mitsubishi UFJ Financial Group is set to merge its securities subsidiary with Morgan Stanley’s Japanese securities operations, to create one of the top three brokerages in Japan. The Japanese bank and Morgan Stanley have been in talks since MUFG invested US$9bn last year into the US broker, for a 21% stake.
Banca Popolare di Milano (BPM) became the fourth Italian bank to announce that it would seek state-backed funding from Italy’s €12bn bank aid scheme. BPM said that it would tap the government scheme for €500m, a move that should give one of Italy’s largest regional banks a core tier one capital ratio of about 8%.
The Irish Republic's economy has suffered its largest contraction in recent decades. The economy shrank by 7.5% in the last three months of 2008 compared with the same period a year earlier, the official statistics office said. The construction industry, which has faced a housing market slump, suffered a 24% fall in output, the biggest fall on record. In the whole of 2008 the economy shrank by 2.3%, the first decline since 1983.
24 March
A key measure of UK inflation has fallen to zero for the first time in 49 years, official figures show. The Retail Prices Index (RPI), which includes housing costs, fell to 0% in February on an annual basis from 0.1% in January.
Bahrain-based Gulf International Bank (GIB) has sold $4.8bn of toxic assets to its shareholders, six Arab Gulf governments. GIB, an investment bank owned jointly by the six hydrocarbon-rich members of the Gulf Co-operation Council, has reported two years of losses totalling US$1.1bn.
Nine of the 10 executives who received top bonuses from US insurance giant AIG have agreed to return them, New York's attorney general said.
23 March
The US has announced details of a plan to buy up to US$1 trillion worth of toxic assets to help repair banks' balance sheets. The Public-Private Investment Programme will purchase the troubled mortgages and securities that have been at the root of the credit crisis. The Treasury has committed US$75bn to US$100bn to the programme and said the private sector would also contribute.
Eurozone industrial output plunged by 3.5% in January compared with the previous month, the biggest decline since records began in 1990.
The world economy is set to shrink by between 0.5% and 1.0% in 2009, the first global contraction in 60 years. In its gloomiest forecast yet, the International Monetary Fund (IMF) says that developed countries will suffer a ‘deep recession’.
20 March
The US Treasury’s auto taskforce laid out US$5bn in federal financing to suppliers in a deal that protects the core of the industry but could spell the end for some weak companies. The loan guarantee package is much smaller than suppliers had requested but was broadly welcomed by the industry and its investors, with shares in large suppliers rising sharply.
ThyssenKrupp is to be the first big German industrial company to slash thousands of permanent jobs because of the global recession, according to the Financial Times, as the country’s largest steelmaker struggles with a sharp downturn in demand. The conglomerate plans to cut more than 3,000 jobs, or 1.5% of its total workforce, in its steel and automotive production units and at its shipyards.
FedEx announced its second US$1bn cost-cutting plan in two years after its quarterly profits plunged 75%. The package delivery company said the worsening global economy was forcing it to cut more jobs and pay, and reduce working hours as profits in the three months to the end of February plunged to US$97m or 31 cents per share, from US$393m or US$1.26 per share in the same period a year earlier.
Britain’s International Motor Show has been cancelled for 2010 because of the uncertainty gripping the global car industry.
India is on course for a deflationary dip after data showed the country’s wholesale price index rose by only 0.44% earlier this month in spite of government efforts to stimulate the economy.
19 March
The US Federal Reserve announced plans to buy US$300bn of US government debt, triggering a plunge in bond yields and the dollar. The US central bank also said it was more than doubling its purchases of securities issued by Fannie Mae and Freddie Mac to US$1,450bn. It said it now expected to keep interest rates near zero for an ‘extended period’ of time.
The Financial Services Authority announced a sweeping overhaul of the UK’s financial regulatory regime, marking a break with its previous ‘light-touch’ approach and attempting to set a new global standard for the post-crisis world. Chairman Lord Turner set out plans to curb banks’ ability to take excessive risks by forcing them to hold more capital and increase their holdings of liquid assets and cash.
The Bank of Japan is to increase its purchases of Japanese government bonds by nearly a third. The bank said its decision to raise buying of JGBs from Y1,400bn a month to Y1,800bn was intended to ensure there was enough liquidity in the financial system to ensure its stability.
UniCredit, one of Italy’s top two banks, is to seek up to €4bn in state aid. The bank, which has expanded into central and eastern Europe and as far as Kazakhstan in the past decade, said it would ask the Italian and Austrian governments for the cash.
18 March
The Bank of Japan (BoJ) has unveiled a draft plan to provide up to Y1,000bn (US$10bn) in subordinated loans to large commercial banks. The BoJ move follows the Bank of England’s decision to buy UK government debt and the Swiss National Bank’s announcement of its plan to intervene in currency markets to drive down the Swiss franc.
UK unemployment has risen above two million for the first time since 1997, official figures have shown.
The World Bank has cut its prediction for China's economic growth in 2009 to 6.5% from 7.5%, saying it could not "escape the impact of global weakness".
17 March
Nokia, the world's largest mobile phone manufacturer, announces plans to shed 1,700 jobs worldwide as part of a cost-cutting drive.
16 March
Serbia has begun talks with the International Monetary Fund (IMF) to agree an emergency loan worth up to €2bn euros.
One in every 56 UK business will fail in 2009, according to a report by accountants BDO Story Hayward. The report estimates that the number of business failures will increase by 59% to 36,000. This compares with 22,600, or one in 87, that failed in 2008.
13 March
On US television programme The Daily Show, host Jon Stewart lambasts CNBC's Jim Cramer and the network itself for not alerting investors and viewers to the financial crisis. "You knew what the banks were doing, and yet were touting it for months and months," Stewart said. "The entire network was. And so now to pretend that this was some sort of crazy, once-in-a-lifetime tsunami that nobody could have seen coming is disingenuous at best and criminal at worst."
12 March
BMW's net profits tumbled nearly 90% to €330m last year, as the global economy weakened and reduced demand for cars.
11 March
Malaysia unveiled a large M$60bn (US$16.2bn) stimulus package, amounting to 9% of GDP, to prevent the export-dependent economy from sinking into a deep recession over the next two years. The package will include guaranteed funds for businesses, equity investments to boost the stock market and tax breaks in addition to increased state spending on infrastructure projects.
Chinese exports plunged 25.7% in February compared with a year ago, as the global economic crisis began to take its full toll on the country’s export sector. China’s exports have decreased for four months in a row.
Iceland nationalised Straumur-Burdaras, the last of the four biggest banks in the country to remain independent.
10 March
Prices paid by Chinese consumers fell for the first time in more than six years last month, prompting warnings from economists that the government will need to act quickly if the country is to avoid a bout of deflation.
Japan’s stock market tumbled to a 26-year low as official figures showing a record current account deficit stoked fears of a deepening recession in the world’s second-biggest economy.
9 March
Japan suffered its largest current account deficit ever in January, raising concerns that it was now in a depression. Japan’s current account fell into deficit for the first time since 1996 and at Y172.8bn (US$1.75bn) was much larger than the Y15.3bn shortfall forecast by economists.
6 March
The Bank of England (BofE) has created £75bn of new money to pump into the economy over the next three months. The BofE conceded that it had run out of options on interest rates after cutting rates as close to zero as possible and needed to take additional unorthodox measures to prevent a slide into deflation.
UK set for 70% economic stake in Lloyds group. Chancellor Alistair Darling has agreed an outline deal that would see the government insure toxic assets of £258bn.
Stock markets in the US and Europe tumbled after Chinese authorities failed to deliver a stimulus package and European central banks slashed interest rates in response to a worsening recession. The S&P 500 dropped 4% to its lowest level since September 1996. Germany’s Dax lost 5%, France’s Cac 40 fell 4% and the UK’s FTSE 100 dropped 3%. Asian markets followed suit: Tokyo’s Nikkei average slid 3.1% and the MSCI index of Asia-Pacific stocks outside Japan was down 0.9%. Australia’s share market fell 1.8%, while South Korea dropped 1.2%. Japan’s Topix dropped to fresh 25-year low, following a 12-year low on Wall Street with growing concerns about the banking sector and the deteriorating health of General Motors.
4 March
The Australian economy is expected to enter recession after contracting for the first time in eight years. Gross domestic product dropped 0.5% in the December quarter from the previous quarter. Year on year growth rose by 0.3%.
The World Bank approved its largest ever loan to a country not classified as being in crisis when it signed a ‘unique’ US$2bn contingency facility to Indonesia to support government spending and external fundraising.
3 March
American International Group (AIG) revealed a US$61.7bn quarterly loss - the largest in US corporate history - and pointed to the next trouble spot for the financial sector by reporting large write-downs in commercial real estate.
Nationalised bank Northern Rock has confirmed that it made a loss of £1.4bn in 2008 following large write-offs on its mortgage loans.
World stock markets plunged this week. The UK's FTSE 100 fell 1.5%, while Germany's Dax and France's Cac 40 were virtually unchanged. Earlier, Japanese stocks traded close to 26-year lows. The Nikkei 225 fell sharply before recovering to 7229.7, down 0.69%. Hong Kong's Hang Seng fell 1.9%, while India's main Mumbai index ended down 2.3%. The US Dow Jones share index fell below 7,000 points for the first time since 1997.
Toyota, the world's biggest carmaker, has asked for US$2bn in state aid to help its car financing unit.
Nortel Networks, the Canadian telecommunications equipment maker operating under Chapter 11 bankruptcy protection, more than doubled its losses to US$2.14bn, mainly reflecting writedowns and a 15% decline in revenues that fell to US$2.72bn from US$3.2bn as customers cut back their spending. For the full year Nortel lost US$5.8bn, compared with a US$957m loss in 2007.
23 February
The United Arab Emirates (UAE) is to lend Dubai US$10bn to ease the emirate's debt repayment schedule in an effort to rescue the struggling economy, officials say.
20 February
US banking shares hit their lowest level since 1992 as fears mounted that the government would be forced to nationalise a key institution, according to the Financial Times. Further heavy selling of key names - Bank of America and Citigroup were once again among the worst performing, down 14% to US$3.93 and 13.8% to US$2.51, respectively - helped push the Dow Jones Industrial Average to its lowest level in six years.
19 February
Taiwan has fallen into recession as its GDP slumps 8.36% in the last quarter of 2008 due to export demand falls.
The Bank of Japan stepped up measures to help companies weather the credit crisis, unveiling plans to buy up to Y1,000bn (US$10.7bn) in corporate bonds and extend its purchases of other assets.
17 February
Lloyds Banking Group lost its long-held Aaa credit rating from Moody’s amid worries about growing losses from HBOS.
Japan experienced a quarter-on-quarter fall of 3.3% in gross domestic product (GDP) in the last three months of 2008, pushing the country into its worst slump in 35 years.
Russia’s industrial production fell by 20% in January, a fall that could signal a much larger than expected drop in GDP this year. The decline was its largest month-on-month drop since records began seven years ago.
13 February
Australia’s Senate passed a A$42bn (US$27.4bn) economic stimulus package.
The Spanish economy has fallen into its first recession for 15 years. Spain’s gross domestic product shrank by 1% in the fourth quarter of last year from the previous quarter, and was down 0.7% on the fourth quarter of 2007, according to official statistics.
12 February
South Korea took another 50 basis points off interest rates, bringing the total cuts to 325 basis points since October. The base rate now stands at 2%.
11 February
UBS lost nearly SFr20bn (US$17bn) in 2008. It said it would axe a further 1500-2000 investment banking jobs, taking employment to 15,000 - about one third less than the peak of almost 23,000 in the credit boom.
General Electric will divert US$9.5bn from last year’s stock sale to its finance arm, GE Capital. The move, which follows last quarter’s US$5.5bn capital infusion, will enable GE Capital to reach its goal of reducing its debt, net of cash, ratio to 6-to-1 earlier than expected.
Royal Bank of Scotland said it was cutting 2300 staff, representing about 2% of RBS’s UK workforce of 106,000.
China's exports fell more than expected in January, down 17.5% from a year earlier, marking the biggest drop in more than 10 years. Imports were down 43.1% in the month compared with a year ago.
10 February
The French government agreed to give Renault and Peugeot-Citroën €3bn each in preferential loans in return for maintaining jobs and sites in France. Under the scheme, Renault Trucks, owned by Volvo, will also get a loan of €500m, suppliers will get loans of €600m and the financing arms of the two carmakers will receive loan guarantees of €2bn. Direct loans to carmakers will be for up to five years at 6% interest.
Latvia’s economy contracted at an annual rate of 10.5% in the fourth quarter of last year raising fears that the country may be unable to stick to the conditions attached to its recent International Monetary Fund (IMF) rescue package.
9 February
Nissan is to cut 20,000 jobs worldwide, 8.5% of its workforce, over the next year because of a sharp fall in sales. The Japanese carmaker made the announcement as it said it expected to make a loss of ¥265bn (US$2.9bn/£2bn) for its current financial year.
Barclays Bank has reported profits before tax of £6.08bn (US$9bn) for the full year of 2008, down 14% on its profits taken in 2007.
6 February
Deutsche Bank announces a net loss of €3.9bn in 2008, its first loss since being restructured after World War II.
The US unemployment rate rose to 7.6% in January 2009, up from 7.2% in December 2008, according to official figures. Unemployment is now at its highest level since 1992.
German industrial output fell by 4.6% in December 2008, figures from the Economy Ministry showed.
5 February
The Bank of England reduces UK interest rates to a record low of 1% from 1.5% in an attempt to boost the economy.
The number of people claiming unemployment benefit in Ireland rose in January 2009 to the highest monthly level since records began in 1967. This is in line with unemployment across the nations that share the euro, which rose to its highest level in more than two years last month.
US President Barack Obama announces a US$500,000 limit on executive pay at US firms that need government aid.
Japanese electronics group Panasonic is to cut 15,000 jobs and close 27 plants worldwide as it seeks to reduce costs.
3 February
The Australian government is to spend A$42bn (€20.88bn) on a second fiscal stimulus package to help boost the economy’s flagging growth prospects as the global downturn threatens the nation with its first recession in close to 17 years. The Reserve Bank of Australia cut its benchmark interest rate by 1 percentage point to 3.25%, its lowest level in almost half a century.
In China, 20 million migrant workers (15.3% of total 130 million) have lost their jobs in the country’s coastal manufacturing centres.
Morgan Stanley is preparing to cut up to 1,800 jobs, or about 4% of its global workforce.
30 January
Ford Motor revealed that is drawing down US$10.1bn from its credit lines from its banks because of “concerns about the instability of the capital markets”.
Japanese industrial production fell a larger-than-expected 9.6% and unemployment rose sharply to 4.4% in December.
29 January
The US House of Representatives has passed President Barack Obama's US$819bn economic stimulus package. The bill would cut taxes for people and businesses by US$275bn, while pumping more than US$540bn into a range of initiatives including road and bridge repair, increased unemployment benefits, investment in new technology and renovations to 10,000 schools.
Canada's Conservative government has unveiled a C$40bn (US$32bn) stimulus package that includes infrastructure spending and tax cuts. Canada, which has not run a budget deficit for more than a decade, will be on course for a C$85bn deficit over five years, according to government estimates.
New Zealand’s central bank cut its official rate by a larger than expected 1.5 percentage points to 3.5% and warned that the country was likely to remain in recession for much of 2009.
27 January
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.
23 January
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.
22 January
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.
21 January
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.
20 January
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.
19 January
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.
16 January
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.
14 January
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.
Company bankruptcies in Japan jumped 24.7% in December from a year earlier.
13 January
German Chancellor Angela Merkel has unveiled an economic stimulus package worth about €50bn to kick-start Europe's largest economy.
12 January
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%.
9 January
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.
8 January
The Bank of England has cut interest rates to 1.5%, the lowest level in its 315-year history.
7 January
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.
2 January
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.
1 January 2009
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.
30 December
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.
23 December
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.
22 December
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.
17 December
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%.
16 December
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.
15 December
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.
12 December
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).
11 December
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.
10 December
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.
09 December
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.
08 December
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.
04 December
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%.
01 December
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.
27 November
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
26 November
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.
25 November
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.
21 November
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.
20 November
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.
19 November
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.
18 November
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.
17 November
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.
12 November
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.
11 November
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.
10 November
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.
9 November
China announces a a two-year US$586bn financial package to help boost the economy.
7 November
The European Central Bank cut borrowing costs by half a percentage point to 3.25%.
6 November
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.
5 November
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%, 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.
4 November
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.
31 October
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.
28 October
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.
27 October
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.
24 October
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%.
21 October
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.
20 October
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.
17 October
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.
The European Central Bank gives Hungary €5bn credit line.
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.
14 October
Lloyds TSB takeover of HBOS falters. UK Treasury drafts full-blown nationalisation plans.
13 October
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.
10 October
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.
9 October
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.
8 October
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.
7 October
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.
6 October
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.
3 October
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.
30 September
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.
29 September
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.
28 September
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.
25 September
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.
22 September
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.
17 September
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.
16 September
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.
15 September
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.
7 September
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.
1 August
US mortgage lender, IndyMac Bancorp, files for Chapter 7 bankruptcy.
22 July
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.
17 March
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.
18 February 2008
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.
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- what is the credit rating scale
- the credit union difference
- the opioid crisis in america
- how to contact the credit bureaus directly
- the crisis in black education
- what are the credit score ranges
- the agricultural revolution timeline 1700
- preparation for the final crisis online
- names of the credit bureaus
- history of the opioid crisis in america
- the credit pros reviews
- the credit crisis of 2008