Financial Crisis Timeline*

Page 4: January 2009 - Now

The university of Iowa center for international finance & Development

Prepared by Jason Cox and Laurie Glapa

Last updated: July 1, 2009

 

 

January 6, 2009:

• The IMF is set to approve a $2.5 billion loan to Belarus.

• The loan will help stabilize the Belarus economy, which has been hit by the global financial crisis due to its reliance on the Russian economy.

  http://www.ft.com/cms/s/0/a040fd84-db91-11dd-be53-000077b07658.html

January 8, 2009:

• The Bank of England cuts interest rates to 1.5% to help ease the flow of credit to companies.

• This brings the UK interest rate to a 315-year low.

  http://www.ft.com/cms/s/0/3be109c8-dd5e-11dd-930e-000077b07658.html

January 9, 2009:

• The German government takes a 25% stake in Commerzbank through a €10 billion capital injection in an effort to help Commerzbank take over Dresdner Bank, a rival institution that has been hit badly by the global financial crisis. :

• Commerzbank is Germany’s second largest lender.

  http://www.ft.com/cms/s/0/1a25c35a-dda4-11dd-930e-000077b07658.html

January 10, 2009:

• Unemployment is the United States jumps to 7.2%, the highest rate in 16 years.

• 2.6 million jobs were lost in 2008, making it the year hardest hit by unemployment since 1945. :

• Unemployment was at 4.4% before the credit crisis hit.

  http://www.ft.com/cms/s/0/ae29f2bc-dedd-11dd-9464-000077b07658.htm

January 14, 2009:

• Standard & Poor’s (S&P) cuts Greece’s credit rating on debt.

• S&P cited the worsening of Greece’s large public debt as the reason for the downgrade.

• Greece is the first major western European country to have its debt downgraded, but Portugal, Spain, and Ireland are being closely watched by the credit rating agencies.

  http://www.ft.com/cms/s/0/9b650d60-e239-11dd-b1dd-0000779fd2ac.html

January 15, 2009:

• The US government has extended a $138 billion bailout to Bank of America (BofA).

• The bailout includes $20 billion in a capital injection and a guarantee on $118 billion of potential losses on remaining toxic assets.

• BofA will issue the government preferred stock for the capital injection, and take responsibility for the first $10 billion of losses associated with the pool of toxic assets. The Treasury and FDIC will pick up the next $10 billion in losses, with the remainder to be absorbed through a Federal Reserve loan.

• BofA is in the process of acquiring Merrill Lynch, which has reported a record loss of $15.31 billion in the fourth quarter of 2008.

  http://www.ft.com/cms/s/0/7ebeb6b0-e35c-11dd-a5cf-0000779fd2ac.html

• Ireland nationalizes Anglo Irish Bank, the country’s third largest lender.

• Trading on the bank’s stock was suspended after the share price suffered a drop of 10.8%.

• The share price plummeted after large-scale deposit withdrawals and government intervention to prevent bankruptcy.

• The Irish government said that the bank to will continue to operate as a going concern but most analysts believe it will be wound down.

  http://www.ft.com/cms/s/0/964f2e9e-e33f-11dd-a5cf-0000779fd2ac,s01=1.html

January 16, 2009:

• The US Senate passes, with a vote of 52-42, to release the remaining $350 billion in the Troubled Asset Relief Program (TARP).

• Barack Obama, the US President elect, vowed that this disbursement of TARP funds will be more transparent and accountable than the first one.

  http://www.ft.com/cms/s/0/5910e8ee-e36f-11dd-a5cf-0000779fd2ac.html

• Citigroup announces an $8.29 billion fourth quarter loss.

• The bank also confirmed that it will split its operations into two distinct business sections, one focusing on traditional banking with the other concentrating on its brokerage business and asset management.

• The split is designed to allow Citigroup to raise private capital without government intervention.

  http://www.ft.com/cms/s/0/62649824-e3c8-11dd-8274-0000779fd2ac.html

• The European Central Bank (ECB) cuts interest rates by half a percentage point to 2%.

• This is the lowest interest rate the eurozone has seen in three years.

• The cut was spurred by worsening conditions noted by economic forecasts. The ECB president, Jean-Claude Trichet, said that growth forecasts released only last month would have to be revised to reflect downward trends.

  http://www.ft.com/cms/s/0/77e48de4-e36e-11dd-a5cf-0000779fd2ac.html

January 19, 2009:

• Gordon Brown announces a bank rescue plan in the United Kingdom.

• The plan has six main components. They are: 1) underwriting toxic assets, 2) altering the terms of the Northern Rock nationalization, 3) providing guarantees for mortgage-backed securities, 4) providing a £50 billion asset purchase facility for the Bank of England, 5) establishing a credit guarantee scheme where the Treasury will guarantee debt issued by banks participating in the recapitalization program, and 6) providng longer access to liquidity for banks who entered the £200 billion Special Liquidity Scheme last October.

• This is the second major bank bailout implemented by the UK, the first was a $400 billion rescue plan announced in October, 2008.

  http://www.telegraph.co.uk/news/newstopics/politics/labour/4289849/Gordon-Browns-bank-rescue-plan---what-the-key-measures-really-mean.html

• Standard & Poor’s (S&P) slashes Spain’s triple A rating (the highest rating available) on debt.

• S&P said that the global financial crisis had highlighted Spain’s structural weaknesses in the economy, which caused it to downgrade Spain’s rating.

• Spain is the first country with a triple A rating to be downgraded by S&P since Japan in 2001.

  http://www.ft.com/cms/s/0/d7ceef24-e625-11dd-8e4f-0000779fd2ac.html

January 22, 2009:

• A group of nine leading international banks in central and eastern Europe lobby the European Union, the European Central Bank, and the national governments in the region to address the problems posed by the global financial crisis.

• The group insisted that the solutions to the current crisis must not only be extended to EU member countries in western Europe but also to the non-EU member states, including prospective member states.

  http://www.ft.com/cms/s/0/397e05f0-e826-11dd-b2a5-0000779fd2ac.html

• Bond insurer CIFG cancels $12 billion in credit default swaps (CDSs) in an attempt to boost its capital.

• The CDSs insured risky assets such as collateralized debt obligations (CDOs) that were funded by residential mortgages.

• The CDSs were terminated in exchange for cash and equity in the company.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE50L4XN20090122

January 23, 2009:

• Reports show the global credit crisis contagion continues to deepen in Asia.

• China announces the slowest growth in seven years, the Bank of Japan reduces economic forecasts for the next two years, and South Korea reports the first decline in quarterly economic growth since the Asian financial crisis.

• The Bank of Japan admitted it could face contraction and deflation in the next two years.

  http://www.ft.com/cms/s/0/9601d0cc-e8ee-11dd-a4d0-0000779fd2ac.html

• The World Bank president Robert Zoellick writes an op-ed piece in the New York Times calling for a worldwide stimulus package.

• Zoellick proposed that the vehicle for the package could be a vulnerability fund managed by the World Bank.

• Zoellick believes that new US President Obama needs to send a message to the rest of the world supporting a worldwide stimulus package by pledging $6 billion to this fund at the G-20 meeting in April.

  http://www.nytimes.com/2009/01/23/opinion/23zoellick.html

January 24, 2009:

• Citigroup sells $12 billion of government-guaranteed bonds in an attempt to strengthen its capital.

• This is the largest bond issue guaranteed by the Federal Deposit Insurance Corporation (FDIC) since the beginning of the financial crisis.

• The bonds mark the second time that Citigroup has taken advantage of the government-backed facility.

• Since the beginning of the financial crisis, Citigroup has taken more than $50 billion in credit-related losses.

  http://www.ft.com/cms/s/0/95de766e-e9ab-11dd-9535-0000779fd2ac,dwp_uuid=61974342-ba1a-11dd-8c2b-0000779fd18c.html

January 25, 2009:

• The International Monetary Fund (IMF) announces that it will significantly adjust its forecasts for global economic growth downward.

• So far, the IMF has contributed $50 billion to member countries in response to the global financial crisis but managing director Dominique Strauss-Kahn expects many more member countries to come to the IMF for help.

  http://www.ft.com/cms/s/0/17628d2e-eae7-11dd-bb6e-0000779fd2ac.html

January 26, 2009:

• Geir Haarde, the prime minister of Iceland, resigns amidst the turmoil created in his country by the global financial crisis.

• Public unrest towards the government in Iceland had been growing since its banking system collapsed last year.

  http://www.ft.com/cms/s/0/859eee98-ebbb-11dd-8838-0000779fd2ac.html

• Companies in the United States and Europe announce 76,000 job cuts, resulting in one of the worst days on record for workers.

• Caterpillar led the way by axing 20,000 jobs.  General Motors, Sprint Nextel, Texas Instruments and others also cut jobs en masse.

  http://www.ft.com/cms/s/0/bb8ec7c0-ebb7-11dd-8838-0000779fd2ac.html

• Fannie Mae and Freddie Mac, the two US government sponsored entities (GSEs) that were nationalized last year, report they will need up to $51 billion in government funds to continue operations.

• Their losses were blamed on continuing mortgage delinquencies and falling securities values.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE50P7EG20090127

January 27, 2009:

• Japan announces a $16.7 billion stimulus package to help businesses that have been decimated by the global financial crisis.

• As part of the package, the Bank of Japan plans to inject capital into the markets by buying corporate debt, which will allow businesses to raise money.

• These measures would most likely help smaller businesses that have had a hard time raising capital because of the worldwide credit freeze.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE50Q0P120090127

February 2, 2009:

• The Kazakhstan government announces it will buy a 78.14% share in the country’s largest bank, BTA.

• The government said it would acquire BTA shares on a temporary basis only.

• BTA chairman, Mukhtar Ablyazov, claimed that the government’s actions towards BTA “represent abuse of power and corporate raiding.”

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5111C720090202

February 3, 2009:

• The Federal Reserve extends the currency swaps lines program by six months.

• The program, designed to increase liquidity throughout the world, provides US dollars to 13 central banks.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5126CZ20090203

February 4, 2009:

• The Treasury Department issues restrictions on executive pay for financial institutions that receive government assistance during the financial crisis.

• Any bank receiving “exceptional assistance” from the US government will be required to limit the pay of senior executives to $500,000 a year.

• The companies will be able to give executives restricted stock above the $500,000 limit but the stock cannot vest until the government has been completely paid back for the assistance given, with interest.

  http://www.ustreas.gov/press/releases/tg15.htm

February 5, 2009:

• Russia announces that it will change its approach to combating the global financial crisis.

• Instead of bailing out individual companies, Russia will attempt to support the economy through the banking sector and limit its deficit through large budget cuts.

• This news followed a credit downgrade of Russia’s debt by the Fitch rating agency.

  http://www.ft.com/cms/s/0/343cf764-f324-11dd-abe6-0000779fd2ac.html

February 6, 2009:

• Regulators close three US banks, bringing the total number of failed US banks to nine in 2009.

• The banks included County Bank of Merced, California; Alliance Bank of Culver City, California; and FirstBank Financial Services of McDonough, Georgia.

• 25 banks failed in 2008 and were put into receivership. This was a significant increase up from the 3 that failed in 2007.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5156HA20090207

February 7, 2009:

• Job losses in the United States reach 3.5 million in the last 12 months, including 500,000 in January.

• The jobs lost in January represent the highest losses in the US since 1974.

• Half of the total job losses occurred in the last three months.

• The unemployment rate has risen to 7.6%, almost double the 4.4% before the credit crisis.

  http://www.ft.com/cms/s/0/84490c96-f4bb-11dd-8e76-0000779fd2ac.html

February  9, 2009:

• Moody’s Investors Service downgrades the credit rating of eight South Korean banks.

• The reason for the downgrades was that the banks depended on the government to secure funding.

• The eight banks included Kookmin bank, Shinhan Bank, Woori Bank, Hana Bank, Industrial Bank of Korea, National Agriculture Cooperative Federation, Korea Development Bank, and Export-Import Bank of Korea.

• Moody’s downgraded the banks to A2, the same rating as the debt issued by the South Korean government.

  http://english.people.com.cn/90001/90778/90858/90863/6588710.html

• RBC Capital Markets released projections which state that more than 1,000 US banks will fail over the next three to five years.

• The analysts forecast that the United States is nowhere near the end of the current crisis and said the current crisis could result in about the same number of failures (1,386) that occurred during the savings and loans collapse in the 1980s.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5187C220090209

February 10, 2009:

• Timothy Geithner, the US Treasury Secretary, introduces the Financial Stability Plan in an attempt to clean up the US financial system.

• The $2 trillion plan includes a financial stability trust to manage the US government’s investments, a public-private investment fund to clean up the banks’ balance sheets, a consumer and business lending initiative, a small business and community lending initiative, and housing support and foreclosure prevention plan.

• Commentators have suggested that the Financial Stability Plan is not detailed enough to restore confidence in the financial system.

  http://www.ustreas.gov/press/releases/tg18.htm

  http://www.financialstability.gov/docs/fact-sheet.pdf

• UBS announces that it lost $17 billion in 2008, the largest corporate loss in Swiss history.

• UBS intends to keep its investment banking division despite cutting 1500-2000 more investment banking jobs.

  http://www.ft.com/cms/s/0/5ff56f5a-f741-11dd-81f7-000077b07658.html

February 11, 2009:

• Ireland pledges to inject $9.05 billion into its top two banks.

• In return, the Bank of Ireland and Allied Irish Banks will give the government preferred shares that allow for a 25% voting right over board appointments and pay an annual dividend of 8%.

• The banks also agree to guarantees on lending, lower executive pay, and mortgage arrears.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE51A89L20090211

February 13, 2009:

• Fannie Mae and Freddie Mac will suspend mortgage foreclosures until March 6th.

• The announcement came before President Obama was scheduled to announce a detailed plan to help prevent more foreclosures.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE51B6B620090213

February 14, 2009:

• The eurozone recession deepens as a 1.5% reduction in gross domestic product is announced for the forth quarter.

• The recession was led by Germany, which saw its economy contract by 2.1%.

  http://www.ft.com/cms/s/0/2bd3c74a-fa38-11dd-9daa-000077b07658.html

• Three large US banks―J.P. Morgan Chase, Citigroup, and Bank of America―agree to halt mortgage foreclosures until early March.

• The moratorium on foreclosures is designed to allow the US Treasury to announce a detailed plan to help restructure mortgages to avoid foreclosure.

  http://online.wsj.com/article/SB123454524404184109.html

• The Group of Seven finance ministers and central bank governors (G7) complete their meeting in Rome.

• The G7 listed four principles that fiscal policy responses should adhere to: “[1] be frontloaded and quickly executed; [2] include the appropriate mix of spending and tax measures to stimulate domestic demand . . . ; [3] increase longer term growth prospects, addressing structural weakness through targeted investments; [ 4] be consistent with medium-term fiscal sustainability and mostly rely on temporary measures.”

• The G7 also warned that protectionist responses to the global financial crisis would only exacerbate the downturn.

  http://www.ft.com/cms/s/0/3c07aac2-faa2-11dd-bda0-000077b07658.html

• At the G7 meeting, Dominique Strauss-Kahn, the Managing Director of the International Monetary Fund (IMF) head, warned that the rest of the world is dangerously close to the recession that has hit the advanced economies.

• Mr. Strauss-Kahn said that the advanced economies now need to turn their attention to cleaning up the banking sector to prevent a worldwide recession.

• The Japanese government signed an agreement with the IMF to provide an extra $100 billion in funds.

  http://www.imf.org/external/pubs/ft/survey/so/2009/NEW021409A.htm

• Japan announces that its economy shrank by 3.3% in the fourth quarter.

• This was Japan’s worst performance in 30 years.

  http://www.ft.com/cms/s/0/8cb1fbc8-fbc7-11dd-bcad-000077b07658.html

February 17, 2009:

• US President Barack Obama signs a $787 billion economic stimulus package into law.

• The stimulus is designed to jump start the economy and create more jobs by through government spending and tax cuts.

  http://www.msnbc.msn.com/id/29231790/

February 18, 2009:

• A study by the Boston Consulting Group shows that the global financial crisis has depleted the market value of the world’s banks by $5.5 trillion.

• This amount is equivalent to 10% of the world’s gross domestic product.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE51H4Z020090218

• The bond insurer MBIA announces plans to restructure into two companies.

• The new company, National Public Finance Guarantee Corp. (NPFG), will be focused entirely on insuring municipal debt.

• MBIA will transfer $537 billion of its municipal debt to NPFG.

• MBIA lost its AAA credit rating last year because of its exposure to structured finance instruments that were backed by subprime mortgages.

  http://www.ft.com/cms/s/0/2cd9ca9e-fe26-11dd-932e-000077b07658.html

February 19, 2009:

• Fears of nationalization cause US bank stocks to fall to their lowest level since 1992.

• The sell-off of financial stocks pushed the Dow Jones Industrial Average to its lowest point in six years.

  http://www.ft.com/cms/s/0/8a163738-fe85-11dd-b19a-000077b07658.html

February 22, 2009:

• The UK injects government funding into Northern Rock for it to engage in a £ 14 billion mortgage sales drive.

• Northern Rock was nationalized by the UK government last year after a run on the bank.

• The mortgage sales drive is aimed at improving the UK housing market and encouraging responsible borrowing.

  http://www.ft.com/cms/s/0/bf276e70-011d-11de-8f6e-000077b07658.html

• In a meeting in Berlin, European leaders agree to revamp regulation in response to the global financial crisis.

• The new regulations will focus on cracking down tax havens and implementing stricter oversight of hedge funds.

• The leaders also agree to increase the supervisory role of the Financial Stability Forum and double the amount of funds for the International Monetary Fund.

• The summit was meant for European leaders to formulate a common stance before the upcoming G20 meeting.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE51L18J20090222

February 25, 2009:

• The US Treasury announces details of the Capital Assistance Program (CAP).

• The CAP plan includes running stress tests on banks to determine if the banks will require additional capital.

• Lending from the CAP will be in the form of preferred shares that will automatically convert to common equity after seven years. This gives the borrowing banks incentive to pay back the loan before the stock converts.

• Banks that borrow from CAP will also be subject to the executive compensation requirements outlined in the Emergency Economic Stabilization Act of 2008.

  http://www.ustreas.gov/press/releases/tg40.htm

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE51O7KU20090225

February 26, 2009:

• The UK government announces a plan to insure $712 billion in toxic assets.

• The Asset Protection Scheme (APS) will be available to banks until March 31.

• The goal of the APS is to increase lending without having to fully nationalize the banking system.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE51P1CO20090226

• Ambac Financial, a large US bond insurer, reports a fourth quarter loss of $2.3 billion.

• Ambac is considering spinning off its municipal insured debt into a separate company called Everspan.

  http://www.ft.com/cms/s/0/d362aa28-03a5-11de-b405-000077b07658.html

February 27, 2009:

• The US Treasury announces it will take a 36% stake in Citigroup.

• Instead of injecting new capital into Citigroup, the Treasury will convert its preferred shares into common stock.

• As part of the agreement, Citigroup will replace some of its board of directors with new independent people.

  http://www.ustreas.gov/press/releases/tg41.htm

  http://www.ft.com/cms/s/0/8d4d59d0-04cb-11de-8166-000077b07658.html

• The UK government releases plans to inject £25.5 billion ($36.5 billion) into the Royal Bank of Scotland (RBS).

• This announcement came after RBS reported the largest corporate loss in Britain’s history—£24.1 billion for 2008.

• RBS will also put £325 billion of its toxic assets into the UK government’s Asset Protection Scheme.

  http://www.ft.com/cms/s/0/39f6fdfe-0471-11de-845b-000077b07658.html

   

• US President Barack Obama releases a 10-year budget outline for the US economy.

• The budget allows for $750 billion of new capital for financial stabilization efforts.

• The budget shows the US deficit quadrupling in 2009 to $1,750 billion.

  http://www.ft.com/cms/s/0/70d20bf8-0470-11de-845b-000077b07658.html

March 1, 2009:

• The US government extends a $30 billion lifeline to AIG.

• The lifeline will be in the form of a standby line of equity that AIG may use to cover its expected losses.

• In return, the government will gain controlling stakes in two of AIG’s largest divisions.

  http://www.ft.com/cms/s/0/d748d406-0688-11de-ab0f-000077b07658.html

March 2, 2009:

• AIG announces a fourth quarter loss of $61.7 billion.

• This loss, equaling around $465,000 a minute, was a record for a US corporation.

• The government lifeline prevented AIG from getting downgraded by the credit rating agencies, a move that could force AIG to come up with billions of dollars.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSN0134457520090303

• HSBC raises $18.1 billion in a rights issue.

• HSBC is Europe’s largest bank and this is Britain’s biggest rights issue.

• HSBC announced it will cut 6,100 jobs in the United States as it shuts down most of its US consumer lending business.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52104W20090302

• The Association of South East Asian Nations (ASEAN) meets to address the global economic crisis.

• This is the first time ASEAN had met since signing the charter last year.

• The goal of ASEAN is to create a regional economic community, similar to the European Union, by 2015.

  http://www.ft.com/cms/s/0/f4d5838c-0752-11de-9294-000077b07658.html

March 3, 2009:

• The US Treasury announces the details on the Term Asset-Backed Loan Facility (TALF).

• TALF will accept AAA asset-backed securities (ABS) as collateral for loans in an attempt to generate lending by unfreezing the ABS market.

• TALF will begin accepting loan applications on March 17.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5225YY20090303

March 4, 2009:

• The European Union announces new regulatory requirements for credit rating agencies.

• The proposed regulations will force the credit rating agencies to register and be directly regulated by the EU.

• The measures still need to be voted on by European Parliament and receive formal endorsement by the EU finance ministers.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5235DC20090304

March 6, 2009:

• The FDIC steps in and closes the Freedom Bank of Georgia, making it the 17th US bank to fail in 2009.

• The bank had $173 million in assets and $161 million in deposits.

• Estimates show the FDIC stands to lose $36.2 million from the closure.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52600220090307

March 9, 2009:

• A study by the Asian Development Bank (ADB) shows that the value of global financial assets tumbled $50 trillion in 2008.

• The losses in Asia alone totaled $9.6 trillion, the highest of any emerging economy.

• ADB said the loss of wealth could equal one year’s worth of global GDP.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5281FN20090309

• The Icelandic Financial Supervisory Authority (IFSA) nationalizes investment bank Straumur Burdaras STRB.IC, the last major Icelandic bank.

• Straumur’s  losses for the fourth quarter were $779 million on loan losses and asset writedowns.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5281S620090309

March 10, 2009:

• Vikram Pundit, Citigroup’s chief executive, informs employees that Citi has generated $19 billion in revenue over the first two months of 2009.

• After suffering five consecutive quarters of multi-billion dollar losses, Citi is expected to have its best profit performance since the third quarter of 2007.

  http://www.ft.com/cms/s/0/dbb79f02-0d33-11de-8914-0000779fd2ac.html

March 11, 2009:

• UBS revised its fourth quarter losses, the largest in Swiss history, from $17 billion to $18.06 billion.

• The additional losses included more asset writedowns and a big US tax fine.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52A1DH20090311

March 12, 2009:

• Bank of America (BoA) CEO Kenneth Lewis reports that BoA was profitable in January and February.

• The fourth quarter of 2008 was the bank’s first quarterly loss in 17 years but Lewis expects BoA to be profitable in 2009 without government help.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52B5DP20090312

• Japan will inject $1.2 billion into regional banks Sapporo Hokuyo, Minami-Nippon, and Fukuho bank.

• Shares in the banks dropped after the announcement.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52C07420090313

• The African Development Bank (AfDB) sets up a $1.5 billion emergency bailout fund to help alleviate the impact of the global financial crisis in Africa.

• According to AfDB president Donald Kaberuka, the facility was necessary even though it marks a departure from AfDB’s main mission of providing development financing.

  http://www.ft.com/cms/s/0/c42209b6-0ea7-11de-b099-0000779fd2ac.html

March 13, 2009:

• G20 finance ministers meet in southern England to discuss strategies to fix the global economy.

• China promised to support the global economy with its stimulus tools if necessary.

• The G20 leaders are scheduled to meet in London on April 2nd.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5250LI20090313

March 17, 2009:

• In February, credit card defaults in the US rose to the highest level in the last 20 years.

• Two of the largest issuers, Citigroup and American Express, reported default rates of around 9%.

  http://www.reuters.com/news/archive/GCA-CreditCrisis?date=03172009

March 18, 2009:

• The Federal Reserve (the Fed) announces that it will buy $300 billion of US government debt in an attempt to bring down US Treasury bond yields.

• The Fed also announces its plans to double its purchase of securities issued by Fannie Mae and Freddie Mac to $1,450 billion.

• The aggressive moves surprised investors and led to higher equity prices.

  http://www.ft.com/cms/s/0/15eb2de2-13d8-11de-9e32-0000779fd2ac.html

• The Bank of Japan plans to provide $10.1 billion to large commercial banks in an attempt to stabilize their balance sheets.

• The money will come in the form of subordinated loans.

  http://www.ft.com/cms/s/0/aedc9ff6-135e-11de-a170-0000779fd2ac.html

March 19, 2009:

• UBS announces that it will buy back $1.3 billion of its bonds in an attempt to boost its capital.

• The buyback will increase its Tier 1 capital ratio, a measure of capital adequacy.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52I2U420090319

• The US Treasury reports it will provide the auto industry with an additional $5 billion in financing.

• The Auto Supplier Support Program will help suppliers of auto parts to remain in business.

• The financing will include government guarantees on shipped parts. It will also allow suppliers to sell their receivables to the government at a small discount.

  http://www.ustreas.gov/press/releases/tg64.htm

March 20, 2009:

• The National Credit Union Administration (NCUA) seizes two of the top US credit union clearinghouses after announcing a critical deterioration in the finances of the institutions.

• US Central Federal Credit Union was the top wholesale credit union in the United States with around $34 billion in assets while the other credit union, Western Corporate Federal Credit Union of San Dimas managed around $23 billion in assets.

• The cost of the regulator takeover will come from a $7 billion industry insurance fund, which will likely lead to higher insurance premiums for the remaining retail credit unions.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52K00Q20090321

• The FDIC revises the fourth quarter losses of the US banking industry upward to $32.1 billion.

• This is the first reported quarterly loss by the US banking industry since 1990.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52J5BG20090320

March 23, 2009:

• The US Treasury announces details of the Public-Private Investment Program.

• This program is part of the Financial Stability Plan announced on February 10, 2009.

• The program includes using $75 to $100 billion from the Troubled Asset Relief Program combined with private capital to generate $500 billion to buy toxic assets from troubled banks.

• The purchasing power of the program may be expanded up to $1 trillion if necessary.

• The program will purchase toxic assets from banks in an auction format, overseen by the FDIC.

  http://www.ustreas.gov/press/releases/tg65.htm

March 25, 2009:

• HSBC announces that it will cut 1,200 jobs in Britain.

• Officials of the union representing HSBC workers estimated the cuts will result in a loss of 2,900 jobs.

• HSBC is Europe’s largest bank with 312,000 employees worldwide.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52O21O20090325

March 26, 2009:

• Updated data from the US Commerce Department shows that the US economy fell at its fastest rate since 1982 in the fourth quarter.

• Gross domestic product in the US shrank by 6.3%, which is slightly better than the 6.6% that was expected.

  http://www.ft.com/cms/s/0/9a973c12-19fe-11de-9f91-0000779fd2ac.html

• Global mergers and acquisitions fall by $444 billion in the first quarter of 2009.

• This 33% drop marks the slowest first quarter in six years.

• Lack of confidence in the markets and the global financial crisis have been blamed for the slowdown.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSLQ56206720090327

• Fortis Bank Nederland announces a $25.11 billion loss in 2008.

• The bank was fully nationalized by the Dutch government for €16.8 billion.

• The Dutch government plans to merge and sell off the bank’s activities by 2011.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52P2RK20090326

March 28, 2009:

• Norway pledges $4.56 billion in support of a greater role for the International Monetary Fund in supervising global financial markets.

• The money will come from a $300 billion fund created by oil and gas revenues.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52R1KY20090328

March 30, 2009:

• The Bank of Spain rescues the first Spanish financial institution since the financial crisis began.

• The government will provide $11.9 billion in liquidity to Caja Castilla La Mancha (CCM) and replace its directors with central bank nominees.

• Spain’s finance minister, Pedro Solbes, said this situation was different than the nationalization of Benesto in 1993 because CCM only accounts for less than 1% of the assets in Spain’s financial system.

  http://www.ft.com/cms/s/0/2cab7a26-1cc2-11de-977c-00144feabdc0.html

March 31, 2009:

• The Organization for Economic Co-operation and Development (OECD) announced projections that world trade will decline by 13.2% in 2009.

• This would be the worst drop since comparable data has been recorded.

• The OECD also forecasted a 4.3% fall in GDP across its thirty-member group with the worst drop in countries that depend heavily on exports such as Japan and Germany.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52U3R420090331

• The Pakistan central bank confirms that it has received $500 million from the World Bank to help stabilize its economy.

• This money is part of the $10 to 15 billion international aid package for the country as discussed in October, 2008.

• Pakistan still expects to receive future funds from the Asian Development Bank and the IMF.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52U0ZK20090331

April 2, 2009:

• The Financial Accounting Standards Board (FASB) announces a relaxation in mark-to-market accounting rules.

• The changes will allow companies to exercise more discretion in accounting for toxic assets―in other words, banks will have the discretion to value their distressed assets higher than under the strict version of the rules.

  http://www.fasb.org/action/sbd040209.shtml

• G20 leaders meet in London to combat the global financial crisis.

• The leaders pledge $1.1 trillion to fight the crisis, with $750 billion of the funding for the International Monetary Fund, $250 billion for world trade financing, and $100 billion for multilateral development banks.

• In addition to the funding, G20 leaders also planned measures for cracking down on tax havens, regulating hedge funds, establishing tougher pay rules for financial institutions, and regulation of the credit rating agencies.

  http://www.ft.com/cms/s/0/5c541a18-1eec-11de-a748-00144feabdc0.html

  http://www.londonsummit.gov.uk/resources/en/PDF/final-communique

April 5, 2009:

• HSBC, Europe’s largest bank, completes a record-breaking rights issue of €12.5 billion to stabilize its balance sheet.

• The issue surpassed Royal Bank of Scotland’s €12 billion issue in 2008, previously recorded as the largest in UK history.

  http://www.ft.com/cms/s/0/716bc256-21ea-11de-8380-00144feabdc0.html

April 6, 2009:

• The Federal Reserve creates foreign currency swap agreements with the European Central Bank, the Bank of Japan, the Bank of England, and the Swiss National Bank.

• Although the Fed is not currently drawing on the swap lines, it has authorized the other four central banks to borrow unlimited amounts of dollars to meet the needs of local banks.

  http://www.ft.com/cms/s/0/eb1f9268-22b6-11de-9c99-00144feabdc0.html

• The Congressional Budget Office (CBO) raises the projected taxpayer cost of the US government’s financial rescue program.

• The analysts originally estimated the Troubled Asset Relief Program would cost the US taxpayers $189 billion but have increased this forecast to $356 billion.

• The CBO stated that the increase in cost was associated with changes in financial market conditions, new transactions, and timing of payments.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE53323420090406

April 8, 2009:

• The Securities and Exchange Commission (SEC) created five new proposals aimed at curbing short selling which has been blamed for exacerbating the financial crisis.

• One of the five proposals included bringing back the uptick rule, which was abolished in 2007. The uptick rule only allows someone to short a stock if the last sale price was higher than the one before it.

• The SEC will open the proposals to 60 days of comment by the public before voting to pass them.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSN0851681720090408

• The US Treasury announces that certain life insurers have met the qualifications for capital injections under the Capital Purchase Program (CPP).

• The insurers qualify because of their bank holding company status.

• Giving insurance companies access to the $700 billion TARP funds could alleviate the problems caused by the large drop in the value of corporate bonds, of which insurers are major investors.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSWEQ00086520090408

April 9, 2009:

• Wells Fargo reports that it will record first quarter profits of $3 billion later this month.

• The profit was more than double what analysts had expected due to a strong showing of its mortgage banking and smooth integration with its acquisition of Wachovia.

  http://www.ft.com/cms/s/0/8cccae00-2516-11de-8a66-00144feabdc0.html

April 13, 2009:

• Goldman Sachs reports first quarter earnings of $1.81 billion, better than analysts expected.

• Goldman also announced plans to issue $5 billion in stock to repay the $10 billion in federal aid it has received.

  http://www.ft.com/cms/s/0/a455df3a-2866-11de-8dbf-00144feabdc0.html

• SEC Chairman, Mary Schapiro, meets with credit rating agencies, investors, and academics about possible changes to the credit rating industry.

• Among the issues discussed were investor reliance on the credit rating agencies, ways to increase competition in the industry, and possible new business models for the rating agencies.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE53E72520090415

April 16, 2009:

• UBS announces an estimated first quarter loss of $1.75 billion and cuts of 8,700 jobs by 2010, more than 11% of its work force.

• The loss, worse than analysts expected, was blamed on further writedowns on illiquid positions and credit losses.

  http://www.ft.com/cms/s/0/c209a82c-2983-11de-9e56-00144feabdc0.html

April 17, 2009:

• Citigroup reports better-than-expected first quarter profits of $1.6 billion.

• This marks Citigroup’s first profit in six quarters.

• Some analysts are concerned that this profit was created by recent changes in accounting rules and Citi cutting back its contribution to loan loss reserves by $1 billion this quarter.

  http://www.ft.com/cms/s/0/253e288c-2b78-11de-b806-00144feabdc0.html

• US President, Barack Obama, announces the appointment of Herbert Allison to oversee the government’s financial stability plan.

• Allison had served as the president and CEO of Fannie Mae after the government took it over in September, 2008.

  http://www.whitehouse.gov/the_press_office/President-Obama-Announces-More-Key-Treasury-Appointments/

April 21, 2009:

• The Global Financial Stability Report, issued by the International Monetary Fund (IMF), increased its estimate on writedowns of US-originated assets to $2.7 trillion.

• Projections show that total writedowns could reach $4 trillion, with 2/3 coming from the banking industry.

  http://www.imf.org/external/pubs/ft/gfsr/2009/01/pdf/text.pdf

April 22, 2009:

• The World Economic Outlook, issued by the International Monetary Fund (IMF), global activity is predicted to contract by 1.3% for 2009.

• This is significantly higher than the IMF figure released in January of 0.5%.

• This prediction is the worse since World War II.

  http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200904221200DOWJONESDJONLINE000798_univ.xml

  http://www.imf.org/external/pubs/ft/weo/2009/01/pdf/text.pdf

April 23, 2009:

• Morgan Stanley announces a larger-than-expected first quarter loss of $578 million.

• In response, Morgan Stanley cuts its dividend by 80% in an attempt to increase its capital, a move that will save $1 billion a year.

  http://www.ft.com/cms/s/0/0338427e-2f9f-11de-a8f6-00144feabdc0.html

April 24, 2009:

• G7 finance ministers meet in Washington D.C. to discuss the global financial crisis.

• The G7 said that the world’s economy showed signs of stabilization but reiterated that t is critical to provide the necessary stimulus to get the financial system running correctly.

  http://www.ft.com/cms/s/0/14f38d4c-30fe-11de-8196-00144feabdc0.html

• The FDIC and National Credit Union Administration close four more banks and one credit union bringing the total for the year to 29 so far. This is significantly higher than the 25 banks in 2008 and 3 in 2007.

• The banks include Eastern Financial Florida Credit Union, First Bank of Beverly Hills in Calabasas, California, First Bank of Idaho in Ketchum, Michigan Heritage Bank of Farmington Hills, Michigan, and American Southern Bank of Kennesaw, Georgia.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE53O0E020090425

April 29, 2009:

• The Bank for International Settlements reports that global cross-border lending between banks fell by almost $5 trillion from March to December 2008.

• This 9 month drop is the largest on record.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE53S3MQ20090429

• Preliminary data from the US commerce department show the US economy contracting by 6.1% in the first quarter of 2009.

• The data is worse than the 4.7% analysts expected but better than the 6.3% contraction on the fourth quarter of 2008.

  http://www.ft.com/cms/s/0/06299c8e-3437-11de-9eea-00144feabdc0.html

April 30, 2009:

• US car maker, Chrysler, files for Chapter 11 bankruptcy protection in New York.

• Chrysler also announced a partnership with Italy’s Fiat.

• This will mark Fiat’s reentrance into the US car market, which it had previously abandoned.

  http://www.ft.com/cms/s/0/76ccd92c-3588-11de-a997-00144feabdc0,dwp_uuid=a491f060-b57f-11dd-ab71-0000779fd18c.html

May 1, 2009:

• Regulators seize Silverton Bank of Atlanta, a bank who provided services to other banks.

• This is the largest bank failure so far in 2009, with $4.1 billion assets.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5406FS20090502

• The US Federal Reserve announces that it will allow commercial mortgage backed securities (CMBS) issued in 2009 to be used as collateral for receiving a loan from the Term Auction Loan Facility (TALF).

• This inclusion is expected to improve the commercial property sector which has been decimated by the global financial crisis.

  http://www.federalreserve.gov/newsevents/press/monetary/20090501a.htm

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5406GC20090501

May  3, 2009:

• East Asia announces plans to create a $120 million emergency fund to help the countries withstand the global financial crisis.

• Japan and China will provide 32% of the funds, South Korea 16%, and the remaining amount to be contributed by the Association of South East Asian Nations (ASEAN).

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5420L220090503

May 4, 2009:

• A US Federal Reserve survey reports that mortgage demand rose in the first quarter for the first time since early 2007—before the subprime mortgage crisis began.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE5435X020090504

May 7, 2009:

• Stress test results for the 19 largest U.S. banks are released.  The results are more encouraging than anticipated.

• 9 of the banks tested, including JP Morgan Chase, Goldman Sachs and MetLife, are found to be adequately capitalized. 

• The tests also expose the 10 most troubled institutions.  GMAC, Wells Fargo, Bank of America and Citigroup, as well as several large regional banks like Keycorp and SunTrust Banks, lacked the capital to withstand the worst-case scenario simulations.  These banks must prepare capital-raising plans by June 8, to be implemented by November 9.

• Some analysts remain wary.  Under worst-case assumptions, experts put potential losses at $600 billion and the likely mortgage failure rate at 1 in 10.

  http://www.nytimes.com/2009/05/08/business/08bank.html?_r=1&scp=2&sq=stress%20test%20results%20may%207&st=cse

  http://www.reuters.com/article/americasRegulatoryNews/idUSN1154040620090511

May 9, 2009:

• Global stocks and crude oil prices rise in response to optimistic stress test results.  Oil closes out at $58 a barrel, close to a six-month high.

  http://www.reuters.com/article/companyNewsAndPR/idUSN0953236820090509

   

May 13, 2009:

• U.S. Treasury releases proposals to regulate OTC derivatives.  Aims include amending the Commodity Exchange Act (CEA) to include larger margin requirements and stronger risk controls as well as increased authority to police fraud and manipulation.

  http://www.financialstability.gov/latest/tg_05132009.html

May 20, 2009:

• Bank of America takes a large step toward meeting capital-raising requirements, reporting $13.47 billion raised through a share sale.

• Ten other U.S. banks are continuing to raise capital through the sale of common shares and non-guaranteed government debt.  State Street Corp received $2.2 billion selling common stock while Citigroup sold a controlling stake in its Smith-Barney unit to raise $6.5 billion in capital.  Keycorp intends to sell $750 million in common shares.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE54I77V20090520. 

May 28, 2009:

• The launch of the Public Private Investment Program (PPIP) is stalled by recovering markets.  Treasury officials still expect a launch in late June or early July but the whole loans portion of the effort, which involves over $1 billion in whole loans backed by the FDIC, may be postponed.

  http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE54R7E420090528

June 1, 2009:

• General Motors files for Chapter 11 bankruptcy protection.  It is the largest manufacturing bankruptcy in American history.

  http://www.nytimes.com/2009/06/02/business/02primer.html?ref=business

June 2, 2009:

• Stock markets in emerging economies are experiencing a strong resurgence.  Since its March 2009 low, the MSCI emerging markets index has gained 68 percent, compared with a 43 percent gain in the developed markets index.

  http://www.reuters.com/article/newsOne/idUSTRE55131G20090602

June 3, 2009:

• First quarter economic reports provide continued cause for concern but also signs of improvement.

• Euro zone GDP, feeling the drag of a 4 percent contraction in the German economy, experiences a 2.5 percent decline overall.  This continued downturn marks the worst recession in continental Europe since World War II.

• The U.S. reports an increase in new factory orders while real GDP remains in decline, though now falling at a slower rate than in the final quarters of 2008.  Fed officials cite rising U.S. debt as problematic.

• Emerging economies lead the world in stock market recovery but still suffer from significant reductions in capital flow, export demand, and foreign investment.

  http://www.ft.com/cms/s/0/559213f8-411d-11de-bdb7-00144feabdc0.html?nclick_check=1

  http://www.reuters.com/article/companyNews/idUSSP47134820090603

• JP Morgan announces that global business activity, as measured by its Global Total Output Index, contracted at its slowest pace in eight months in May.  An upturn in the global manufacturing index was offset by an accelerated downturn in services activity.

  http://www.reuters.com/article/companyNewsAndPR/idUSL3103747320090603

• U.S. banks generate more capital than required by regulators, selling common stock and nonguaranteed debt to raise more than $85 billion since May 7.  Mutual funds and other large institutional investors are buying aggressively and stock prices reflect the improving climate.  Bank of America shares are up 263 percent from their March low, JP Morgan is up 118 percent.

  http://online.wsj.com/article/SB124398503075879165.html

June 10, 2009:

• 10 banks are allowed to exit the U.S. TARP program. 

• The first to exit include American Express, Goldman Sachs, Morgan Stanley and JPMorgan Chase.  Combined, they will return $68.3 billion, more than a quarter of the federal bailout money issued by TARP since October 2008.

  http://www.reuters.com/article/bigMoney/idUS132273542420090610

• China questions the role of the dollar as the international reserve currency, arguing for the diversification of national currencies used as reserves.  Chinese leaders propose expanding IMF Special Drawing Rights for use as reserve currency. 

• U.S. Treasury Secretary Tim Geithner responds with confidence about the dollar’s stability.  He says the U.S. is committed to keeping inflation under control and maintaining the dollar’s status as a reserve currency.

  http://www.ft.com/cms/s/0/f2236be4-6239-11de-b1c9-00144feabdc0.html

June 13, 2009:

• The G8 convenes for a summit in Lecce, Italy. 

• G8 leaders agree on fragile economic recovery but clash on post-crisis exit strategies and the possibility of stress tests for European banks.  The U.S. and Canada push for greater transparency in the face of the steepest decline in Euro Zone history: a 21.6 percent drop in industrial production.

  http://www.bloomberg.com/apps/news?pid=20601087&sid=aq3lMVEOm878

  http://www.ft.com/cms/s/0/d1b1fad0-57b0-11de-8c47-00144feabdc0.html
   

June 16, 2009:

• The European Central Bank publishes its Financial Stability Review, saying Euro Zone banks will need to write down $283 billion more by the end of next year. 

• Most large European banks seem adequately capitalized, but risks to financial stability “remain high”.  Rising corporate default and falling property prices in Eastern Europe give cause for concern.

• ECB staff expect Euro Zone output to shrink by 4.6% this year.

  http://online.wsj.com/article/SB124507821480115325.html

June 17, 2009:

• BRIC country leaders (from Brazil, Russia, India and China) convene in Yekaterinburg, Russia for one-day summit.

• BRIC countries account for 40 percent of the world’s population and 15 percent of its economy.

• The BRIC countries seek a greater voice in the global economy and a more diversified approach to its management, voicing criticism of the U.S. dollar’s role as reserve currency and calling for comprehensive reform of the United Nations.  BRIC leaders mean to “send a message to Washington” about the economic interests and representation of emerging economies.
  http://online.wsj.com/article/SB124513772364618177.html

June 18, 2009:

• President Obama reveals a dramatic overhaul of way the U.S. government oversees financial markets.  The sweeping changes, criticized by some as too hasty, aim to promote innovation while discouraging abuse.  They propose:
  For the Supervision of Financial Institutions

• A new Financial Services Oversight Council of financial regulators to identify emerging systemic risks and improve interagency cooperation.

• New authority for the Federal Reserve to supervise all firms that could pose a threat to financial stability, even those that do not own banks.

• Stronger capital and other prudential standards for all financial firms, and even higher standards for large, interconnected firms.

• A new National Bank Supervisor to supervise all federally chartered banks.

• Elimination of the federal thrift charter and other loopholes that allowed some depository institutions to avoid bank holding company regulation by the Federal Reserve.

• The registration of advisers of hedge funds and other private pools of capital with the SEC.
  For the Regulation of Financial Markets

• Enhanced regulation of securitization markets, including new requirements for market transparency, stronger regulation of credit rating agencies, and a requirement that issuers and originators retain a financial interest in securitized loans.

• Comprehensive regulation of all over-the-counter derivatives.

• New authority for the Federal Reserve to oversee payment, clearing, and settlement systems.
  For Consumer Protection

•  A new Consumer Financial Protection Agency to protect consumers across the financial sector from unfair, deceptive, and abusive practices.

• Stronger regulations to improve the transparency, fairness, and appropriateness of consumer and investor products and services.

• A level playing field and higher standards for providers of consumer financial products and services, whether or not they are part of a bank.
  For Government Management of Financial Crisis

• A new regime to resolve nonbank financial institutions whose failure could have serious systemic effects.

• Revisions to the Federal Reserve’s emergency lending authority to improve accountability.
  For Improved International Regulatory Standards and Cooperation

• International reforms to support our efforts at home, including strengthening the capital framework; improving oversight of global financial markets; coordinating supervision of internationally active firms; and enhancing crisis management tools.

  http://online.wsj.com/article/SB124524649229423271.html#mod=djemalertNEWS

  http://www.financialstability.gov/roadtostability/regulatoryreform.html

• Treasury Secretary Tim Geithner will chair the administration’s planned “council of regulators”.  The Council, composed of eight heads of the top regulation organizations, would co-ordinate policy and advise the Federal Reserve on emerging risks.

  http://www.ft.com/cms/s/0/06b3749c-5b9f-11de-be3f-00144feabdc0.html

June 20, 2009:

• The European Union approves a plan to create a European Systemic Risk Council for financial regulation.  The Council will have an advisory role, leaving enforcement in the hands of national governments.

• European Central Bank leaders criticize the compromise plan, insisting that the Systemic Risk Council (to be headed by the president of the ECB) should have the ability to act on its own recommendations.

  http://online.wsj.com/article/SB124541961471231443.html

June 24, 2009:

• Russia’s RTS index has fallen 21 percent since its peak on June 2.  The FTSE All World Emerging index has, by contrast, dropped only 9.7 percent since June 1.  Forecasters predict a contraction in the Russian economy of more than 7 percent this year. 

  http://www.ft.com/cms/s/0/55956528-6024-11de-a09b-00144feabdc0.html

June 25, 2009:

• The BEA releases revised first-quarter figures for the U.S. economy: GDP declined by an annualized rate 5.5 percent, considerably better than the original estimate of 6.1 percent.  Output is beginning to pick up as manufacturing and housing markets show signs of life.   Unemployment reached 9.4 percent in May and is expected to climb to 9.6 percent in June.

  http://www.ft.com/cms/s/0/453a5a72-618b-11de-9e03-00144feabdc0.html

  http://www.ft.com/cms/s/0/f3c99d60-6248-11de-b1c9-00144feabdc0.html

• The European Central Bank lends a record $622 billion to Euro Zone banks at the ECB current key rate of 1 percent. 

• The one-year loans reflect continued funding problems in Euro Zone banks, expectations that the region’s economy will begin recovering this year, and the ECB’s commitment to bolster European banks even while other policymakers attempt to wind down stimulus spending.

  http://online.wsj.com/article/SB124583774423646701.html

 

* The entries in this timeline are drawn directly or indirectly from press reports cited in the timeline

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