The financial crisis: Timeline

• January 17: Shares of Bear Stearns hit a record high of $171.51
• February 7: Lehman Brothers’ stock reaches an all-time high of $86.18
• June 22: Bear Stearns announces plans to bail out one of its hedge funds because of subprime mortgage losses
• July 18: Bear Stearns says two of its hedge funds that made bad bets on subprime debt are virtually worthless
• Mid-August: Canada’s third-party asset-backed commercial paper market freezes up
• August 22: Lehman Brothers announces plans to close its subprime mortgage business; Bank of America buys a 16% stake in Countrywide for $2 billion
• September 13: The United Kingdom’s fifth largest mortgage lender, Northern Rock, is granted emergency funding by the Bank of England
• October 11: The Dow Jones Industrial Average hits a then-record high of 14,279.96
• October 30: Merrill Lynch CEO Stan O’Neal is ousted after the brokerage posts a Q3 loss of $2.24 billion—the biggest loss in its history
• November 4: Charles Prince quits as chairman and CEO of Citigroup after poor thirdquarter results due to losses on collateralized debt obligations and mortgage-backed securities

Read: The financial crisis: Five years later

2008

• January 11: Jimmy Cayne, head of Bear Stearns, resigns as a result of the brokerage’s subprime losses; Bank of America announces plans to buy Countrywide for $4.1 billion
• February 17: Northern Rock is placed into a “temporary period of public ownership”
• March 14: Shares of Bear Stearns drop in half while JPMorgan, backed by the U.S. Federal Reserve, provides emergency funding to the brokerage
• March 16: JPMorgan reaches agreement to buy Bear Stearns, which was the verge of collapsing, for $236 million, or $2 a share
• March 18: Lehman posts a profit of $489 million in the first quarter
• March 24: JPMorgan raises its offer for Bear Stearns to $1.2 billion, or $10 a share
• April 1: Lehman raises $4 billion in capital
• April 15: At Lehman’s annual meeting, CEO Richard Fuld says: “the worst of the impact of the financial markets is behind us,” adding that “the current environment will remain challenging”
• June 6: The S&P/TSX Composite Index reaches an all-time high of 15,154.77
• June 9: Lehman expects Q2 loss of approximately $3 billion and will raise an additional $6 billion in capital
• June 12: Lehman replaces chief financial officer Erin Callan and chief operating officer Joseph Gregory
• July 11: After a run on the bank and a rise in loan defaults, regulators seize control of IndyMac, the ninth largest mortgage lender in the U.S.
• September 2: Lehman is reportedly in talks to sell a 25% stake to Korea Development Bank; those talks break down a week later
• September 7: The U.S. government seizes control of mortgage giants Freddie Mac and Fannie Mae
• September 10: Lehman announces strategic restructuring and a Q3 loss of $3.9 billion
• September 13-14: Barclays and Bank of America—two of Lehman’s reported suitors—decide not to buy the investment bank
• September 14: A consortium of 10 banks try to enhance liquidity and mitigate volatility by establishing a collateralized borrowing facility
• September 15: Lehman Brothers makes Chapter 11 bankruptcy filing, Bank of America agrees to buy Merrill Lynch, and AIG seeks financing from the Federal Reserve; the Dow Jones Industrial Average plunges 504 points
• September 16: The Federal Reserve authorizes the Federal Reserve Bank of New York to loan up to $85 billion to AIG, and the U.S. government takes a 79.9% stake in the insurance company
• September 17: Barclays agrees to acquire Lehman Brothers’ North American investment banking and capital markets operations and supporting infrastructure for about $1.75 billion; the S&P/TSX enters bear market territory, closing below 12,000; the Federal Reserve’s attempt to calm fears in the market fails as global markets fall sharply
• September 18: The Federal Reserve, in conjunction with some of the world’s largest central banks, injected $180 billion into the markets in an attempt to improve liquidity; Lloyds TSB agrees to buy Halifax Bank of Scotland for $22.2 billion to try and stabilize financial markets in the United Kingdom
• September 19: The U.S. Securities and Exchange Commission prohibits short selling in 799 financial companies for 10 business days, effective immediately, while the U.S. Treasury will insure the holdings of any publicly offered eligible money market mutual fund—both institutional and retail—that pays a fee to participate in the program
• September 20: The Treasury submits legislation to Congress requesting authority to purchase troubled assets up to $700 billion from financial institutions in order to promote market stability
• September 21: The Fed allows Goldman Sachs and Morgan Stanley to convert to bank holding companies from investment banks
• September 22: U.S. markets tumble because of fears Democrats and the federal government won’t be able to agree on terms of the bailout package; Morgan Stanley plans to sell up to 20% of itself to Japan’s largest bank, Mitsubishi UFJ Financial Group
• September 23: Treasury secretary Henry Paulson and Fed chairman Ben Bernanke testify before the Senate Banking Committee, urging lawmakers to move quickly and approve a plan to buy troubled assets from financial institutions; Berkshire Hathaway, run by billionaire Warren Buffett, plans to invest $5 billion in Goldman Sachs
• September 25: Bailout talks stall; Washington Mutual fails, making it the biggest bank failure in U.S. history. Most of its assets are sold to JPMorgan Chase for $1.9 billion
• September 28: Lawmakers in the U.S. agree on bailout package; the Dutch, Belgian and Luxembourg governments bail out Fortis
• September 29: Citigroup acquires the banking assets of Wachovia; U.S. House of Representatives votes against the bailout package
• October 1: U.S. Senate votes in favour of a revised bailout package; SEC extends short selling ban on financial companies
• October 2: The S&P/TSX closes below 11,000
• October 3: On its second attempt, the U.S. House votes in favour of the revised bailout package called the Troubled Asset Relief Program; President George W. Bush signs the bill into law shortly thereafter
• October 6: BNP Paribas acquires Fortis’s operations in Belgium and Luxembourg; Dow closes below 10,000
• October 7: The Federal Reserve announces it will support the commercial paper market in the U.S.; the S&P/TSX closes below 10,000
• October 8: In a co-ordinated effort to try to prevent the credit crisis from getting worse, The Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sweden’s Sveriges Riksbank and the Swiss National Bank all cut interest rates by 50 basis points; the U.K. unveils a rescue plan for its banks; AIG gets an additional loan of $37.8 billion from the New York Fed
• October 9: The Dow closes below 9,000
• October 10: The Government of Canada plans to maintain the availability of longer-term credit by purchasing up to $25 billion in insured mortgage pools through the Canada Mortgage and Housing Corp.
• October 13: The Dow jumps 936 points on speculation the U.S. government will buy stakes in major American financial institutions
• October 14: The Treasury announces it will use $250 billion of the $700 billion financial rescue plan to inject capital into banks by purchasing preferred shares
• November 6: The Bank of England unexpectedly reduces the benchmark interest rate by 1.5 percentage points to the lowest since 1955 while the ECB cut rates by 50 basis points
• November 12: The Government of Canada announces plans to purchase up to $50 billion more of insured mortgage pools by the end of the fiscal year while the Bank of Canada says it will inject another $8 billion into the financial system
• November 23: The U.S. government enters into an agreement with Citigroup to provide a package of guarantees, liquidity access and capital. The Treasury and the FDIC will provide protection against the possibility of large losses on an asset pool of about $306 billion of loans and securities backed by residential and commercial real estate and other such assets. As a fee for this arrangement, Citigroup plans to issue $7 billion in preferred shares to the Treasury and FDIC.

2009

• February 17: The American Recovery and Reinvestment Act of 2009, commonly known as the stimulus, is signed into law by President Barack Obama
• March 3: The S&P/TSX drops as low as 7,501.10, a decline of more than 50% in just nine months
• March 9: The Dow and the S&P 500 both close at a 12-year lows of 6,547.05 and 676.53, respectively
• September: Canada’s unemployment rate peaks at 8.7%
• October: The U.S. unemployment rate hits 10%; it was as low as 4.4% throughout late 2006 and early 2007