![]() Lloyds TSB announces it is to take over Britain's biggest mortgage lenderĬreating a banking giant holding close to one-third of the UK's savings and mortgage market. AIG gets the loan in return for an 80% stake in the firm. Merrill Lynch, also stung by the credit crunch, agrees to be taken over by Bank of AmericaĪnnounces an $85bn rescue package for AIG, the country's biggest insurance company, Lehman Brothers files for Chapter 11 bankruptcy protection,īecoming the first major bank to collapse since the start of the credit crisis.įormer Federal Reserve chief Alan Greenspan dubs the situation as "probably a once in a century type of event" and warns that other major firms will also go bust. Wall Street bank Lehman Brothers posts a loss of $3.9bn for the three months to August.Īfter days of searching frantically for a buyer, Treasury Secretary Henry Paulson says the two firms' debt levels posed a "systemic risk" to financial stability and that, without action, the situation would get worse. Mortgage lenders Fannie Mae and Freddie Mac - which account for nearly half of the outstanding mortgages in the US -Īre rescued by the US government in one of the largest bailouts in US history. The US labour market figures, which showed the unemployment rate rising to 6.1%, were a further jolt to investors who have had to swallow a slew of poor economic data in recent days. Sees the FTSE notch up its steepest weekly decline since July 2002. ![]() The Treasury announces a one year rise in stamp duty exemption,Ī raft of negative news from around the world In an effort to kick-start the UK housing market In an interview with the Guardian newspaper, saying the current downturn would be more "profound and long-lasting" than most had feared. Warns that the economy is facing its worst crisis for 60 years Looking ahead, it warned it expected arrears to remain at high levels for the rest of the year. Nationwide reveals that UK house prices have fallen by 10.5% in a year.īradford and Bingley posts losses of £26.7m for the first half of 2008,īlaming surging mortgage arrears for a rise in impairment. The previous week, there had been a panic amongst investors that they might collapse, causing their share prices to plummet.Ĩ% of HBOS investors agree to take up the new shares offered in its £4bn rights issue,īecause they are priced higher than existing shares are trading on the stock market.īut HBOS still gets the £4bn it wanted, as the unsold new shares are bought by the issue's underwriters. Step in to assist America's two largest lenders, Fannie Mae and Freddie Mac.Īs owners or guarantors of $5 trillion worth of home loans, they are crucial to the US housing market and authorities agree they could not be allowed to fail. blaming its exposure to the US sub-prime mortgage crisis. Stock markets around the world recover the previous day's heavy losses.Īnnounces a loss of $2.3bn - its biggest to date for a three-month period It is the first emergency cut in rates since 2001. its biggest cut in 25 years - to try and prevent the economy from slumping into recession. Suffer their biggest falls since 11 September 2001.Ĭuts rates by three quarters of a percentage point to 3.5% Global stock markets, including London's FTSE 100 index, Predicts that global economic growth will slow in 2008,Īs the credit crunch hits the richest nations. There is concern that insurers will not be able to pay out, forcing banks to announce another big round of losses. They guarantee to repay the loans if the issuer goes bust. Ratings agency Standard and Poor's downgrades its investment rating of a number of so-called monoline insurers, which specialise in insuring bonds.
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