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New York - The crisis in world financial markets, which began when prices plummeted in the US real-estate market in the autumn of 2006, is assuming ever larger dimensions.
So far, it is estimated that banks worldwide have had to write down more than $500bn in assets.
Here is a chronology of major events:
June 2007: Alarm bells ring on Wall Street as two hedge funds of the New York investment bank Bear Stearns lurch to the brink of collapse because of their extensive investments in mortgage-backed securities.
July/August 2007: A number of German banks with bad investments in the U.S. real-estate market are caught up in the crisis, including IKB Deutsche Industriebank, Sachsen LB (Saxony State Bank), and BayernLB (Bavaria State Bank).
September 2007: The British bank Northern Rock is besieged by worried savers. The British government and Bank of England guarantee the deposits, and the bank is nationalised.
October 2007: Profits at the US financial giant Citigroup drop sharply. Then one large financial institution after another reports billions of dollars in writedowns and heavy losses. The CEO of US investment bank Merrill Lynch is replaced by John Thain, head of the New York Stock Exchange.
November 2007: Citigroup CEO Charles Prince resigns.
January 2008: The Swiss banking giant UBS reports more than $18bn in writedowns for 2007 on account of its exposure to the reeling US real-estate market. It announces another $19bn in writedowns in April. In the United States, the Bank of America acquires Countrywide Financial in a deal that rescues the country's biggest mortgage lender. Bear Stearns CEO James Cayne loses his job.
February 2008: The US Congress approves a $150bn spending package to stimulate the sluggish economy.
March 2008: On the verge of collapse and under pressure by the Federal Reserve, the US central bank, Bear Stears is forced to accept a buyout by US investment bank JPMorgan Chase at a fire-sale price. The deal is backed by Fed loans. In Germany, Deutsche Bank reports a loss of €141m for the first quarter of 2008, its first quarterly loss in five years.
July 2008: The California mortgage lender IndyMac collapses. Troubles for US mortgage giants Fannie Mae and Freddie Mac continue to grow. Spain's largest property developer, Martinsa-Fadesa, declares insolvency.
September 2008: The US government takes over Fannie Mae and Freddie Mac. The crisis at US investment bank Lehman Brothers deepens. Stock prices of other financial institutions also fall sharply, including those of the U.S. investment bank Merrill Lynch, the insurance giant American International Group (AIG), and Washington Mutual, the largest US savings and loan bank.
September 15, 2008, "Black Monday": Lehman Brothers files for bankruptcy, Merrill Lynch agrees to be acquired by the Bank of America, and AIG reportedly seeks a bridge loan of billions of dollars from the Federal Reserve.
- Sapa-dpa