Timeline Global Markets2

8/14/2019 Timeline Global Markets2

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THE GLOBAL

FINANCIALCRISIS

A seesaw is a long, narrow board suspended in the middle

so that, as one end goes up, the other goes down. Theorigins of the word come from the visibility gained and lost

as players take turns giving each other a vantage point.

The board is balanced in the exact center. Persons seated on

each end and take turns pushing their feet against the

ground to lift their end into the air. Playground seesaws

usually have handles for the riders to grip as they sit facing

each other. One problem with the seesaw's design is that if

a child allows himself/herself to hit the ground suddenly

after jumping, or exits the seesaw at the bottom, the other

child may fall and be injured. For this reason, seesaws areoften mounted above a soft surface.

10/17/2008 Global Crisis: Timeline

Part I provides a timeline of major events in the crisis 2007-

2008. Part II lists financial institutions with major writedowns,

while Parts III and IV look at the fates of these institutions (in

table form). Part V includes useful graphics and tables.


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The Global Financial Crisis

Page 1

The Global Financial Crisis2 0 0 7 - 2 0 0 8 T I M E L I N E

T I M E L I N E O F E V E N T S 2

2007: SUB-PRIME MARKET COMPLICATIONS ..................................................................... 2

APRIL-AUGUST 2007: SUB-PRIME CONTAGION ................................................................. 2

AUGUST 2007: THE SCOPE OF THE CRISIS EXPANDS ......................................................... 2

SEPTEMBER 2007: A BANK RUN ......................................................................................... 2

OCTOBER 2007: WRITEDOWNS ........................................................................................... 3

OCTOBER-NOVEMBER 2007: MORTGAGE AND DERIVATIVES MARKETS WORSEN .......... 3

DECEMBER 2007: OFFICIAL INTERVENTIONS ..................................................................... 3

DECEMBER 2007: BOND INSURERS FALTER ........................................................................ 3

JANUARY 2008: RUNS ON FUNDS AND MARKETS............................................................ 3

FEBRUARY - MARCH 2008: LARGE INSTITUTIONS FAIL ..................................................... 3

APRIL - JUNE 2008: LOOKING FOR CASH .......................................................................... 4

JULY 2008: MARKET MAKERS FAIL .................................................................................... 4

AUGUST - SEPTEMBER 2008: NO MORE INVESTMENT BANKING ...................................... 5

OCTOBER 2008: THE BAILOUTS .......................................................................................... 5

F I N A N C I A L I N S T I T U T I O N S W I T H M A J O R W R I T E D O W N S 7

B A N K S ' S U B P R I M E - R E L A T E D L O S S E S S U R G E T O $ 5 9 1 B I L L I O N . 9

S T A T U S O F F I R M S U N A B L E T O R A I S E P R I V A T E C A P I T A L S U F F I C I E N T

T O C O V E R W R I T E D O W N S . 1 3

I N T E R N A T I O N A L R E S C U E P A C K A G E S : G R A P H I C . 1 6


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T I M E L I N E O F E V E N T S 1

2007: SUB-PRIME MARKET COMPLICATIONS

The US housing market weakens as housing prices fall and borrowers increasingly default on sub-prime loans.Governmental review of rating mechanisms for subprime lending and related derivatives instruments revealsthat instrument rating formulas were nearly identical to those employed in the traditional mortgage market,

and incorrectly assumed similar rates of rescheduling and default.

APRIL-AUGUST 2007: SUB-PRIME CONTAGIONApril: New Century Financial, which specialises in sub-prime mortgages, files for Chapter 11 bankruptcy

protection. New Centurys collapse begins to impact banks which had purchased New Century instrumentsaround the world.

July: Bear Stearns informs investors that they will receive little or none of the money invested in two of its

hedge funds, following a refusal by other banks to assist in a bailout.

AUGUST 2007: THE SCOPE OF THE CRISIS EXPANDS9 August 2007: BNP Paribas freezes investor withdrawals from two hedge funds, claiming that the assetscannot be valued accurately due to a "complete evaporation of liquidity" in the market. The European CentralBank pumps 95bn euros (63bn) to try to improve liquidity, adding another 108.7bn euros in the following

days. The Fed, the Bank of Canada and the Bank of Japan also launch interventions.

17 August: The Fed continues to follow a cheap money solution, cutting its bank lending rate 50 basis points

to 5.75%.

28 August: German regional bank Sachsen Landesbank nears sub-prime based collapse, and is sold toLandesbank Baden-Wuerttemberg.

SEPTEMBER 2007: A BANK RUN3 September: German corporate lender IKB announces a $1bn loss on investments linked to the US sub-primemarket. IKBs difficulties lead to an investor run the first in a long series of such withdrawals (see Table II).

4 September: LIBOR hits 6.7975%. Banks restrain lending out of concerns about one others solvency, or are

themselves unable to secure financing.

13 September: Northern Rock Bank (UK) is granted emergency financial support from the Bank of England, in

the latter's role as lender of last resort. On 14 September, depositors withdraw 1bn in the UKs biggestbank run for more than a century, until the government issues a depository guarantee.

18 September: The Fed cuts its main interest rate to 4.75%.

19 September: The Bank of England announces that it will auction 10bn, reversing a prior no-injection policy.

1 Compiled from the Financial Times, Forbes, BBC and CreditWriteDowns.com.


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OCTOBER 2007: WRITEDOWNS1 October: UBS (Switzerland) announces $3.4bn in losses from sub-prime related investments, alongside theresignations of its chairman and chief executive. Citigroup unveils a sub-prime related loss of $3.1bn, with an

additional $5.9bn written down in following weeks. Within six months, its stated losses amount to $40bn.

30 October: Merrill Lynch's chief resigns after a $7.9bn bad debt exposure is announced.

OCTOBER-NOVEMBER 2007: MORTGAGE AND DERIVATIVES MARKETSWORSENIn the US and UK, default rates continue to rise. Spains covered bond markets begin to attract concern.

DECEMBER 2007: OFFICIAL INTERVENTIONS6 December: US President George W Bush outlines a tax relief proposal to assist a million homeowners facingforeclosure. The Bank of England cuts interest rates by a quarter of one percentage point to 5.5%.

13 December: The Fed coordinates interbank intervention in short-term banking institution financing by fiveleading central banks. The Bank of England participates despite prior resistance, calling intervention an

attempt to "forestall any prospective sharp tightening of credit conditions." LIBOR temporarily drops andstabilizes.

17 December: Another round of central banks funding is announced. The Fed announces a $20bn auction and

the European Central Bank auctions $500bn the next day.

DECEMBER 2007: BOND INSURERS FALTER19 December: Standard and Poor's downgrades several larger monoline insurers (specialists in bond

insurance who basically provide credit default swaps). Banks are forced to write down further, as investor

concerns about the banks insurers solvency grows.

JANUARY 2008: RUNS ON FUNDS AND MARKETS18 January: Scottish Equitable delays funds withdrawals by up to 12 months, as investors rush to withdraw

from its commercial property funds. SE claims necessity based on the sub-prime mortgage collapse and risinginterest rates.

21 January: Global stock markets take their greatest single-day hits since 11 September 2001.

22 January: The Fed drops rates to 3.5%, leading to a rebound in global stock markets.

31 January: UK bond insurer MBIA announces a loss of $2.3bn, blaming the US sub-prime mortgage crisis.

FEBRUARY - MARCH 2008: LARGE INSTITUTIONS FAIL10 February: Leaders from the G7 group of industrialised nations say worldwide losses stemming from thecollapse of the US sub-prime mortgage market could reach $400bn.

17 February: The UK nationalizes Northern Rock Bank.


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7 March: The Fed makes $200bn of funds available to banks and other institutions to try to improve liquidity

in the markets.

11 March: The Dutch government approves break-up plan for ABN Amro, issuing a declaration of noobjection to a plan proposed by Royal Bank of Scotland, Santander of Spain and Fortis, the Belgo-Dutch

group.

17 March: Bear Stearns is acquired by JP Morgan Chase for $240m, backed by $30bn of central bank

loans. In the first quarter of 2007, Bear Stearns was valued at $34 bn.

APRIL - JUNE 2008: LOOKING FOR CASH2 April: Moneyfacts, which monitors financial products, says 20% of mortgage products have been withdrawnfrom the UK market in the previous seven days. The 100% mortgage disappears on 7 April, when Abbey

Financial withdraws the last home loan available without a deposit.

8 April: The IMF warns that potential losses from the credit crunch could reach above $1 trillion, as effects

spread into other sectors including commercial property, consumer credit, and company debt. The effects of

the credit crunch are likely to be broader, deeper and more protracted than previously expected.

21 April: The Bank of England announces a 50bn plan under which struggling banks may swap mortgagedebts for secure government bonds.

22 April: Royal Bank of Scotland, struggling to balance its losses, announces a 12bn rights issue, whilewriting down 5.9bn over the second quarter of 2008.

2 May: More than 850 UK companies went into administration between January and Marchwith retail and

construction firms hardest hit.

22 May: UBS (Swiss) launches a $15.5bn rights issue to cover some of its $37bn losses on mortgage-related

assets.19 June: The FBI arrests 406 people, including brokers and housing developers, as part of an investigation

into mortgage frauds worth $1bn. Two former Bear Stearns employees face criminal charges related to thecollapse of two hedge funds linked to sub-prime mortgages, on allegations of non-disclosure to investors.

20 June: Derivatives broker MF Global, spun out of U.K. hedge fund manager MAN Group in July 2007,

seeks $300 million in additional financing that will be dilutive to common shareholders, and lowers revenue

and profit guidance.

25 June: Barclays announces a 4.5bn share issue to balance its books. The Qatar Investment Authority, a

sovereign wealth fund, will invest 1.7bn in Barclays, giving it a 7.7% share in the business.

JULY 2008: MARKET MAKERS FAIL13 July: US mortgage lender IndyMac collapses.

14 July: Financial authorities announce that the debts of Fannie Mae and Freddie Mac, owners or guarantorsof $5 trillion worth of home loans, will be those of the United States.


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21 July: Halifax Bank of Scotland (HBOS) investors do not participate in its 4bn rights issue, forcing the

issue's underwriters to buy unsold shares. In the following days, HBOS announces that profits for the first halfof 2008 fell 72% to 848m. Bad debts rose 36% to 1.31bn as customers failed to repay loans.

AUGUST - SEPTEMBER 2008: NO MORE INVESTMENT BANKING

4 August: HSBC (UK) announces a 28% fall in half-year profits.

29 August: Bradford and Bingley (UK) posts losses of 26.7m for the first half of 2008.

7 September: Mortgage lenders Fannie Mae and Freddie Mac are placed under conservatorship.

10 September: Lehman Brothers posts a loss of $3.9bn for June-August 2008.

15 September: Lehman Brothers files for Chapter 11 bankruptcy protection. Merrill Lynch agrees to be

acquired by Bank of America for $50bn.

16 September: The Fed announces an $85bn rescue package for AIG to save it from bankruptcy, in exchangefor an 80% public stake in the firm.

17 September: HBOS (UK) is acquired by Lloyds TSB for 12bn, after a run on HBOS shares.

25 September: Washington Mutual is shut down by regulators and sold to JPMorgan Chase.

28 September: European banking and insurance giant Fortis is partially nationalized to ensure its survival, as

Netherlands, Belgium and Luxembourg agree to inject 11.2bn euros ($16.1bn).

29 September: Bradford & Bingley (UK) is nationalized. The British government assumes the bank's 50bn

mortgages and loans, while its savings operations and branches are sold to Spain's Santander. The Icelandicgovernment nationalizes Glitnir bank which, like Bear Stearns earlier, collapsed in a day after being unable

to buy back its assets after overnight repo market financing. Wachovia is bought by Citigroup; Citigroup will

absorb up to $42bn of Wachovia losses.

30 September: Dexia (European) is bailed out, as the Belgian, French and Luxembourg governments announce

a 6.4bn euros ($9bn) injection. Ireland announces a universal and 100% deposit guarantee scheme, for twoyears.

OCTOBER 2008: THE BAILOUTS1 October: The EU announces an inquiry into Ireland's full guarantee scheme under Community competition

law.

3 October: The US House of Representatives passes HR 1424, a $700bn staggered bailout package.

6 October: Germany announces a 50bn euro ($68bn) injection into Hypo Real Estate, alongside private

banks. The German government says it will not pass depository guarantees. Denmark announces a 100%savings guarantee. Sweden increases its protection levels. Iceland announces a banking sector stabilization

plan, under which the country's largest banks agree to sell off some of their foreign assets.

7 October: Iceland nationalizes Landsbanki, owner of a number of European savings institutions. Later in theweek, reports emerged of plans to secure Kaupthing bank through merger or government financing.


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8 October: UK government announces a 50bn banking sector rescue package. The Federal, European

Central Bank (ECB), Bank of England, and the central banks of Canada, Sweden and Switzerland makeemergency interest rate cuts of half a percentage point. The Fed cut its base lending rate to 1.5%, the ECB to3.75%, and the Bank of England to 4.5%.

10 October: Asian, European and US markets crash.

11 October: The G7 nations issue a five-point plan of "decisive action" to unfreeze credit markets, after a

meeting in Washington.

13 October: Royal Bank of Scotland (RBS), Lloyds TSB and HBOS will receive 37bn in UK governmentalinjections.

14 October: The US will purchase $250bn in stakes in a wide variety of banks. Concerns rise about sovereign

default, particularly with respect to Pakistan, Argentina, Ukraine, Latvia, Kazakhstan, Turkey and Iceland.

15 October: Figures for US retail sales in September show a fall of 1.2%, the biggest monthly decline in morethan three years, as consumer confidence drops.

16 October: Hungary and Ukraine approach the IMF for assistance; to date, the IMF has agreed to support

relief in Hungary. Hungarys problems stem from foreign currency loans and big budget deficits. Ukraines

banks face difficulties repaying foreign credits as its current account widens.

17 October: Eight European banks form a preferred interbank lending consortium, the Unico Banking Group,comprised of: Credit Agricole, DZ Bank, Iccrea Holding, Pohjola Bank, Rabobank and Raiffeisen Zentralbank,and Raiffeisen Switzerland.

18 October: Analysts predict Iceland will seek IMF assistance over the weekend, as Russia remains cool to its

requests for emergency lending. With Iceland on the edge of bankruptcy, Iceland adopted banking

legislation which gives the state broad banking operations powers, including state compulsion of mergers and

declaration of bankruptcy by a bank. Other European nations are threatening legal action based on theterms of its depository guarantees, alleging discrimination against foreign holders. The krona has lost half its

value against other currencies and no longer is being traded. In other restrictions, Icelandic citizens use of

credit cards abroad has been limited, corporations may only foreign currency to import fuel, food or

medicine, and individuals may only obtain foreign currency with an international airline ticket. Iceland had

established itself in recent years as an offshore banking haven for continental Europe, and banking services

comprised the largest sector of its economy in 2008.


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F I N A N C I A L I N S T I T U T I O N S W I T H M A J O R W R I T E D O W N S 2

ACA Fannie Mae Morgan Stanley

Accredited Home Lenders Fifth Third Bancorp

Munich Re

AIG First Horizon National Australia Bank

Alliance & Leicester Fortis National Bank of Canada

Allianz Freddie Mac National City

Ambac Fremont General Natixis

American Express Gateway New Century Financial

American Home Mortgage GE (WMC Mortgage) Northern Rock

ANZ Bank GMAC Novastar Financial

BankAtlantic Goldman Sachs Peloton Partners

Bank of America H&R Block PMI Group

Bank of China Hannover Re Postbank

Bank of Montreal HBOS Radian Group

Bank United HSBC RBC

Barclays Huntington Bancshares RBS

Basis Capital IKB Regions Financial

Blackstone IndyMac Sachsen Landesbank

BNP Paribas ING Scotia Bank

Bradford and Bingley Japan Socit Gnrale

Capital One JP Morgan Chase SunTrust Bank

Carlyle Group Kensington Swiss Re

CIBC KeyCorp Triad

Citigroup Legg Mason UBS

Columbia Bancorp Lehman Brothers US Bancorp

2 From http://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html.
http://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#ACAhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#ACAhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fanniehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fanniehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Morgan%20Stanleyhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Accredited%20Homehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fifth%20Thirdhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fifth%20Thirdhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Munichhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Munichhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#AIGhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#AIGhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#First%20Horizonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#NABhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#AandLhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#AandLhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fortishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fortishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#NBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#NBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Allianzhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Freddiehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Freddiehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#NCChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#NCChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Ambachttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fremonthttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Natixishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Natixishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#AMEXhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Gatewayhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#New%20Centuryhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#American%20Homehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#GEhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Northern%20Rockhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Northern%20Rockhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#ANZhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#ANZhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#GMAChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#GMAChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Novastarhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Atlantichttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Goldmanhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Goldmanhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Pelotonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Pelotonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Bank%20of%20Americahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Bank%20of%20Americahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#HandRhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#PMIhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#PMIhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Bank%20of%20Chinahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Bank%20of%20Chinahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Hannoverhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Hannoverhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Postbankhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Montrealhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Montrealhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#HBOShttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Radianhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Radianhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Unitedhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Unitedhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#HSBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#RBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Barclayshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Huntingtonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#RBShttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#RBShttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Basishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Basishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#IKBhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#IKBhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Regionshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Blackstonehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#IndyMachttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Sachsenhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Paribashttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Paribashttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#INGhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Scotiahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Bradford%20and%20Bingleyhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Japanhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.htmlSocGenhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Capital%20Onehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Capital%20Onehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#JP%20Morganhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#SunTrusthttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Carlylehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Carlylehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Kensingtonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Swiss%20Rehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#CIBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#CIBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Keyhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Triadhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Triadhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Citigrouphttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Legg%20Masonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#UBShttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Columbiahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Lehmanhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#US%20Bancorphttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#US%20Bancorphttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#US%20Bancorphttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Lehmanhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Columbiahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#UBShttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Legg%20Masonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Citigrouphttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Triadhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Keyhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#CIBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Swiss%20Rehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Kensingtonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Carlylehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#SunTrusthttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#JP%20Morganhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Capital%20Onehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.htmlSocGenhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Japanhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Bradford%20and%20Bingleyhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Scotiahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#INGhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Paribashttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Sachsenhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#IndyMachttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Blackstonehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Regionshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#IKBhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Basishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#RBShttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Huntingtonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Barclayshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#RBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#HSBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Unitedhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Radianhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#HBOShttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Montrealhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Postbankhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Hannoverhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Bank%20of%20Chinahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#PMIhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#HandRhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Bank%20of%20Americahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Pelotonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Goldmanhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Atlantichttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Novastarhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#GMAChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#ANZhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Northern%20Rockhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#GEhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#American%20Homehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#New%20Centuryhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Gatewayhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#AMEXhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Natixishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fremonthttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Ambachttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#NCChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Freddiehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Allianzhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#NBChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fortishttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#AandLhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#NABhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#First%20Horizonhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#AIGhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Munichhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fifth%20Thirdhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Accredited%20Homehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Morgan%20Stanleyhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Fanniehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#ACA


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Page 8

Comerica Lloyds TSB Wachovia

Commerzbank (incl. Dresdner) M&T Bank Washington Mutual

Credit Agricole Marshall and Ilsley Wells Fargo

Credit Suisse

MBIA WestLBDeutsche Bank Merrill Lynch Zions

Duesseldorfer Hypothekenbank MGIC
http://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Comericahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Lloydshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Wachoviahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.htmlCommerzhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#MandThttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#WaMuhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Agricolehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Marshallhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Marshallhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Wells%20Fargohttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Credit%20Suissehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Credit%20Suissehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#MBIAhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#WestLBhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Deutschehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Merrillhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Zionshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Zionshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Duesseldorferhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Duesseldorferhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#MGIChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#MGIChttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Duesseldorferhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Zionshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Merrillhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Deutschehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#WestLBhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#MBIAhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Credit%20Suissehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Wells%20Fargohttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Marshallhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Agricolehttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#WaMuhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#MandThttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.htmlCommerzhttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Wachoviahttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Lloydshttp://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html#Comerica


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Page 9

B A N K S ' S U B P R I M E - R E L A T E D L O S S E S S U R G E T O $ 5 9 1 B I L L I O N : T A B L E 3

The following table shows the $590.8 billion in asset writedowns and credit losses at more than 100 of theworld's biggest banks and securities firms as well as the $434.2 billion capital raised to cope with them.

Firm Writedown & Loss Capital Raised Spread

Citigroup Inc.* 60.8 71.1 10.3

Wachovia Corporation* 52.7 11.0 -41.7

Merrill Lynch & Co. 52.2 29.9 -22.3

Washington Mutual Inc. 45.6 12.1 -33.5

UBS AG 44.2 28.0 -16.2

HSBC Holdings Plc 27.4 5.1 -22.3

Bank of America Corp. 21.2 20.7 -0.5

JPMorgan Chase & Co. 18.8 19.7 0.9

Morgan Stanley* 15.7 14.6 -1.1

IKB Deutsche

Industriebank AG

14.8 12.2 -2.6

Royal Bank of Scotland

Group Plc

14.1 23.1 9

Lehman Brothers HoldingsInc.

13.8 13.9 0.1

Credit Suisse Group AG 10.4 3.0 -7.4

Deutsche Bank AG 10.4 6.1 -4.3

Wells Fargo & Company 10.0 5.8 -4.2

Credit Agricole S.A. 8.8 8.5 -0.3

Barclays Plc 7.6 17.9 10.3

Canadian Imperial Bank 7.2 2.8 -4.4

3 Note, AR: The author has edited a table originally appearing in Yalman Onaran and Dave Pierson, Banks' Subprime-Related

Losses Surge to $591 Billion: Table, http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSlW.imTKzY8

(Bloomberg, 29 September 2008), retaining excerpts of the original text. Specifically, I have added the fourth column,

Spread, to indicate which firms have faced rescue or bankruptcyor are likely do so in the near future.


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Page 10

of Commerce

Fortis* 7.1 23.1 16

Bayerische Landesbank 6.9 0.0 -6.9

HBOS Plc 6.8 7.2 0.4

ING Groep N.V 6.7 4.6 -2.1

Societe Generale 6.6 9.4 2.8

Mizuho Financial Group

Inc.

6.1 0.0 -6.1

National City Corp. 5.4 8.9 3.5

Natixis 5.3 11.8 6.5

Indymac Bancorp Inc 4.9 0.0 -4.9

Goldman Sachs Group Inc. 4.9 10.6 5.7

Lloyds TSB Group Plc 4.7 4.8 0.1

Landesbank Baden-

Wurttemberg

4.7 0.0 -4.7

WestLB AG 4.6 7.2 2.6

Dresdner Bank AG 3.9 0.0 -3.9

BNP Paribas 3.9 0.0 -3.9

E*TRADE Financial Corp. 3.6 2.4 -1.2

HSH Nordbank AG 3.5 1.8 -1.7

Rabobank 3.5 0.0 -3.5

Nomura Holdings Inc. 3.4 1.2 -2.2

Bear Stearns Companies

Inc.

3.2 0.0 -3.2

Bank of China Ltd 3.1 0.0 -3.1

DZ Bank AG 2.6 0.0 -2.6

Landesbank Sachsen AG 2.5 0.0 -2.5

UniCredit SpA 2.5 0.0 -2.5


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Page 11

Commerzbank AG 2.3 0.0 -2.3

ABN AMRO Holding NV 2.2 0.0 -2.2

Royal Bank of Canada 2.2 0.0 -2.2

Fifth Third Bancorp 1.9 2.6 0.7

Dexia SA 1.6 0.0 -1.6

Mitsubishi UFJ Financial

Group

1.6 1.6 0

Bank Hapoalim B.M. 1.5 2.5 1

Marshall & Ilsley Corp. 1.4 0.0 -1.4

Alliance & Leicester Plc 1.3 0.0 -1.3

U.S. Bancorp 1.3 0.0 -1.3

Bank of Montreal 1.2 0.0 -1.2

KeyCorp 1.2 1.6 0.4

Groupe Caisse d'Epargne 1.2 0.0 -1.2

Hypo Real Estate Holding

AG*

1.1 0.0 -1.1

Sovereign Bancorp Inc. 1.0 1.9 0.9

Gulf International Bank 1.0 1.0 0

Sumitomo Mitsui Financial

Group

1.0 4.9 3.9

Sumitomo Trust and

Banking Co.

0.8 1.0 0.2

National Bank of Canada 0.7 1.0 0.3

DBS Group Holdings

Limited

0.2 1.1 0.9

Other European Banks* 9.1 2.9 -6.2

Other Asian Banks 5.5 8.9 3.4

Other US Banks 2.9 4.8 1.9


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Page 12

Other Canadian Banks 0.4 0.0 -0.4

TOTAL 590.8 434.2 -156.6

All the charges stem from the collapse of the U.S. subprime-mortgage market and reflect credit losses orwritedowns of mortgage assets that aren't subprime, as well as charges taken on leveraged-loan commitments

since the beginning of 2007. They are net of financial hedges the firms used to mitigate losses and pre-taxfigures unless the bank only provided after-tax numbers. Credit losses include the increase in the provisions for

bad loans, impacted by the rising defaults in mortgage payments.

Capital raised includes common stock, preferred shares, subordinated debt and hybrid securities which count

as Tier 1 or Tier 2 capital as well as equity stakes or subsidiaries sold for capital strengthening. Capital data

begins with funds raised in July 2007.

All numbers are in billions of U.S. dollars, converted at today's exchange rate if reported in another currency.


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S T A T U S O F F I R M S U N A B L E T O R A I S E P R I V A T E C A P I T A L S U F F I C I E N TT O C O V E R W R I T E D O W N S

Firms Status Source

Wachovia

Corporation*

Acquired See above

Merrill Lynch

& Co.

Acquired See above

Washington

Mutual Inc.

Acquired See above

UBS AG GovernmentFinancing

See above

HSBC

Holdings Plc

GovernmentFinancing

See above

Bank of

America Corp.

Solvent,acquisition of

Merrill Lynch

cleared

http://news.smh.com.au/business/bank-of-america-merrill-deal-cleared-20081016-51pg.html

Morgan

Stanley*

Acquired See above

IKB DeutscheIndustriebank

AG

Germanbailout

http://online.wsj.com/article/SB122375258121026119.html?mod=googlenews_wsj

Credit Suisse

Group AG

Recent capital

raise

http://www.forbes.com/markets/economy/2008/10/16/credit-suisse-

closer-markets-equity-cx_ll_lal_1016markets43.html

Deutsche

Bank AG

NTR Not participating in rescue

Wells Fargo &

Company

Fed 250bn

bank injection

http://www.time.com/time/magazine/article/0,9171,1851140,00.html

Credit

Agricole S.A.

UNICO

participant

See above

Canadian

Imperial Bank

of Commerce

NTR Stock performing well; general trend among Canadian financial institutions


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Page 14

Bayerische

Landesbank

Exploring

merger withLandesbank

Baden-Wurttemberg

http://www.forbes.com/feeds/ap/2008/10/13/ap5543393.html

ING Groep

N.V

NTR

Mizuho

Financial

Group Inc.

NTR

Indymac

Bancorp Inc

Nationalized See above

Landesbank

Baden-

Wurttemberg

Exploring

merger with

BayerischeLandesbank

http://www.forbes.com/feeds/ap/2008/10/13/ap5543393.html

Dresdner

Bank AG

Allianz hasagreed to sell

Dresdner to

Commerzbank

http://www.ft.com/cms/s/0/6171b42e-9ba7-11dd-ae76-000077b07658.html

BNP Paribas Struggling,

bailout

See above

E*TRADE

Financial

Corp.

NTR

HSH

Nordbank AG

Rating cut

Rabobank UNICOparticipant

See above

Nomura

Holdings Inc.

Acquiring

Lehmans Asia-

Pac ops

http://www.japancorp.net/Article.Asp?Art_ID=20305

Bear Stearns

Companies

Inc.

Acquired See above

Bank of China Government http://www.iht.com/articles/ap/2008/10/17/america/Sovereign-


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Page 15

Ltd support Wealth-Funds-Investment.php

DZ Bank AG UNICO

participant

See above

Landesbank

Sachsen AG

Sold to

LandesbankBaden-

Wuerttemberg

See above

UniCredit SpA 2.5 0.0

Commerzbank

AG

Acquires

Dresdner

http://www.ft.com/cms/s/0/6171b42e-9ba7-11dd-ae76-

000077b07658.html

ABN AMRO

Holding NV

Liquidated in

ongoing assetssale

http://www.ft.com/cms/s/0/931024ea-ef98-11dc-8a17-

0000779fd2ac.html

Royal Bank of

Canada

NTR

Dexia SA Bailout See above

Marshall &

Ilsley Corp.

NTR

Alliance &

Leicester Plc

Acquired bySantander

http://www.ft.com/cms/s/0/6171b42e-9ba7-11dd-ae76-000077b07658.html

U.S. Bancorp NTR

Bank of

Montreal

NTR

Groupe

Caisse

d'Epargne

600m euros in

unauthorized

trading losses;under

investigation;exploring

merger with

BanquePopulaire

http://www.nytimes.com/2008/10/18/business/worldbusiness/18frenchb

ank.html?ref=europe

Hypo Real

Estate Holding

AG*

German

bailout

See above


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G R A P H I C S A N D T A B L E S 4

BANKS AFFECTED BY THE GLOBAL CRISIS - 2008

Bank Date Status

Fannie Mae 07 Sep Nationalised

Freddie Mac 07 Sep Nationalised

Lehman Bros 15 Sep Collapsed

Merrill Lynch 15 Sep Taken over

AIG 16 Sep Part-nationalised

HBOS 17 Sep Taken over

WaMu 25 Sep Collapsed and sold

Fortis 28 Sep Nationalised

Bradford &

Bingley

29 Sep Nationalised

Wachovia 29 Sep Taken over

Glitnir 29 Sep Nationalised

Hypo Real Estate 06 Oct Rescue package

RBS 13 Oct Part-nationalised

Lloyds TSB 13 Oct Part-nationalised

4 http://news.bbc.co.uk/2/hi/business/7644238.stm.

Documents

Timeline Global Markets2