Timeline: So, how did we end up here again?

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It is almost four years since the first credit crunch, and again the global economy is staring into the abyss. Here, we chart the chain of events that has led us back to square one...


9 August

France's BNP Paribas suspends three funds because it cannot place a value on their packages of sub-prime mortgage debts from the US. Cracks begin to appear in the global financial system amid concern about complex products, based on questionable mortgages in the US.


News emerges that Northern Rock has asked for emergency support from the Bank of England, triggering biggest UK bank run in a century.


21 January

World stock markets record their biggest fall since 9/11.


Northern Rock nationalised.


JPMorgan, backed by loans from the New York Fed, buys crisis-hit Bear Stearns, Wall Street's fifth biggest investment bank.


Sense of crisis escalates as IMF warns that potential losses from global credit crunch could reach $1trn.

7 September

The US Treasury takes over Fannie Mae and Freddie Mac, the government-backed mortgage giants that played a leading role in expanding sub-prime loans.

15 September

Lehman Brothers, Wall Street's fourth largest investment bank, files for bankruptcy, triggering panic in the markets. Bank of America says it will buy troubled stockbroker Merrill Lynch in a $50bn deal.

16 September

US government seizes control of AIG. The $85bn intervention comes after the Lehman collapse sends markets into an indiscriminate selling frenzy.

17 September

The events in the US spark a sell-off in UK banking stocks as investors flee. HBOS agrees to be bought by Lloyds TSB.

3 October

President Bush signs the Emergency Economic Stabilisation Act into law, creating the $700bn Troubled Asset Relief Programme to back the financial sector.

8 October

Prime Minister Gordon Brown unveils a £500bn plan to prop up Britain's ailing banks.

16 December

US cuts interest rates to near zero – the lowest in the history of the Federal Reserve.



G20 leaders gather in London; Gordon Brown hails $1trn recovery package for the world economy. Measures include a tripling of the IMF's resources to $750bn.


Dubai is at the centre of a storm after state-backed Dubai World shocks investors by asking for a debt standstill.

30 November

Greece feels the heat after markets focus on its debts. The country's Finance Minister George Papaconstantinou says: "We are concerned the international markets are looking at us in a worried way."


Fitch cuts Greece's credit rating to BBB+. Standard & Poor's and Moody's follow suit.



Greece announces plans to cut its deficit, sparking violence on the streets. Spain plans to save €50bn.


Eurozone finance ministers approve €30bn aid for Greece. S&P cuts Portugal's ratings by two notches.


EU and IMF set up a €750bn financial safety net to protect the eurozone.


European banks are "stress tested" to see how they would deal with an escalation in the crisis. Of the 91 tested, seven fail, and 17 pass by narrow margins.


S&P cuts Ireland's credit rating.


Spain steps up austerity drive with a tough 2011 budget.


The EU and IMF begin working on a rescue package as Ireland announces €15bn austerity plan. The EU approves €85bn rescue for Ireland. Republicans take control of the US House of Representatives with a promise to scale back spending.



Portugal follows Greece and Ireland in asking for EU help. The €78bn bailout is approved in the middle of May.


US reaches its $14.3trn debt limit.


IMF says US must strike a deal so that world can avoid a "severe shock".


EU leaders prepare another rescue package for Greece.


In the US, Republicans and Democrats finally reach a compromise, but stock markets tumble again as fears grow that Italy and Spain may need a bailout.