Credit Crisis Timeline

There have been tremendous economic dislocations during the present banking crisis. Initially written off as a sub-prime crisis, leading policy makers said the crisis was contained. It has since spilled over into Jumbo mortgage rates, Collateralized Debt Obligations (CDOs), all asset backed securities, High Yield bonds, SIVs, the inter-bank market, commercial paper, money market funds, the auction rate market, hedge fund losses, and a massive housing bust and the real economy. Banks and financial institutions from around the world are writing down billions of dollars of losses. Housing markets are falling in the US, the UK, Spain and Ireland. This crisis is truly global.

I decided to take a look to get a comprehensive view of what this was doing to our financial system. Below is my list of major announcements of asset writedowns, bank failures, CEO dismissals, trading losses, capital raising and job losses at major global lending institutions as a direct result of the credit crisis of 2007-2009.

In addition, I have included a number of pre-crisis merger announcements that served as prelude to an increased risk taking after the deals closed and leading up to the crisis. This is not just a chronological listing of events and news in the housing bubble and credit crisis but also

a timeline of major crisis events and writedowns by financial institution. I believe it to be the most comprehensive data set on writedown statistics on the web.
a running tally of credit writedowns by global banks (now over $1 trillion)
a look back at the increasing amounts of capital raised by global financial institutions

The list reaches far and wide and should give one pause as to the ability of the global financial system to recover from this calamity without significant recessionary effects in the real economy in the U.S. and elsewhere. The losses and needed capital continually rise, with investors willing to infuse these institutions with capital time and again.

This crisis was consistently underestimated as it gathered steam. It was far from a subprime crisis, but rather a debt or credit crisis because of the debt and deleveraging threatening global financial stability.

Bank Writedowns – the long list of writedowns and related events by financal institution.
Banking Crisis Timeline – A list of all of the credit crisis events in reverse chronological order.

If you need some quick background information on particular events or firms in the credit crisis, you’ve come to the right place. However, if you want a quick and dirty guide to the credit crisis, I have posted a shorter version of the credit crisis (through October) that should be more accessible and a quicker read. It’s called “The Dummy’s Guide to the U.S. Banking Crisis”.

Go directly to the latest news additions or to the chronological timeline of major credit crunch events

The following is a framework of the types of articles you should see here and in the two related lists. I need to note that this list doesn’t include rumor, speculation or negotiations. The list only includes actual events in the financial services sector after they have occurred and includes the following categories.

Writedowns of assets, Capital raising, Job cuts, Bankruptcies, Ratings changes, Managerial changes, Earnings reports, Lawsuits, Some significant stock price changes

Timeline: Sub-prime losses (BBC News)
United States housing bubble including timeline (Wikipedia)
Subprime crisis impact timeline (Wikipedia)
Subprime mortgage crisis (Wikipedia)
The U.S. sub-prime crisis in graphics (BBC News)
Subprime lending (Wikipedia)
Timeline of a Crisis, (WSJ thru Mar 2008)
Housebuilders in crisis: timeline (The Guardian)

Credit crunch: Around the world (BBC News) – one year

Banking crisis timeline (September and October 2008) – Guardian

What is a credit writedown?

It is a reduction in the value of an asset as it is carried on a firm’s balance sheet. As these losses must also be reflected on the income statement, credit writedowns result in massive losses.

For example, a company may believe a number of mortgage-backed securities are permanently impaired and are carried on the balance sheet at values that do not reflect market prices. As a result, they may decide to take a writedown by reducing the valuation.

Also, unlike a writeoff, a writedown does not result in a total elimination of the asset from the balance sheet, just a reduction in its carrying value.

Return to Index

HSBC shock announcement begins the pre-panic phase
2007 02 08 HSBC to Boost Loan-Loss Provisions on Bad Mortgages
2007 02 08 Subprime Mortgage Bond Risks Surge, Index Suggests
2007 02 22 HSBC announces departure of two top executives at U.S. business
2007 03 04 U.S. triggers $11bn HSBC fall-out
2007 03 05 New Century Leads Drop in Shares of Mortgage Lenders
2007 03 12 DR Horton warns of huge losses
2007 03 12 New Century shares are suspended
2007 03 21 `Short Sellers’ Who Predicted Subprime Rout See More Declines
2007 04 02 New Century Financial in Chapter 11 move
2007 04 05 NovaStar Cuts Off Credit Lines for Mortgage Bankers
2007 05 30 Kensington agrees to £283m buyout