Intro
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
Index
- Useful Primers
- Chronological Timeline of Major Credit Crisis and Housing Bubble Events
- Latest Writedown News
- Predicted Final Loss Estimates
- Total Present Global Losses Tally
- Financial Services Job Losses
- Capital Raised Tally
- Government Action
- Bank Writedowns – now kept on a separate page
Primers
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 yearBanking 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
Timeline
HSBC shock announcement begins the pre-panic phase
2007 02 08 HSBC to Boost Loan-Loss Provisions on Bad Mortgages2007 02 08 Subprime Mortgage Bond Risks Surge, Index Suggests2007 02 22 HSBC announces departure of two top executives at U.S. business2007 03 04 U.S. triggers $11bn HSBC fall-out2007 03 05 New Century Leads Drop in Shares of Mortgage Lenders2007 03 12 DR Horton warns of huge losses2007 03 12 New Century shares are suspended2007 03 21 `Short Sellers’ Who Predicted Subprime Rout See More Declines2007 04 02 New Century Financial in Chapter 11 move2007 04 05 NovaStar Cuts Off Credit Lines for Mortgage Bankers2007 05 30 Kensington agrees to £283m buyoutPrelude to panic starts with Bear Stearns hedge fund losses
2007 06 23 $3.2 Billion Move By Bear Stearns To Rescue Fund2007 07 30 IKB Cuts Profit Forecast Amid Rout in U.S. Mortgages2007 07 31 American Home Can’t Fund Mortgages, Shares Plummet2007 08 02 Accredited May Face Bankruptcy, Merger in Doubt2007 08 06 American Home files for bankruptcy2007 08 08 Fund of German Bank WestLB Stops Payouts, Citing Mortgage Market UneasePanic of 2007
2007 08 09 BNP Paribas Freezes Funds as Loan Losses Roil Markets2007 08 14 Goldman and Investors to Put $3 Billion Into Fund2007 08 15 Countrywide Financial ‘risks bankruptcy’2007 08 17 Fed Cuts Discount Rate to 5.75% to Ease Credit Crunch2007 08 21 SachsenLB Has EU3 Billion in Subprime, Person Says2007 08 22 H&R Block Taps Credit Line, Cites `Unstable’ Markets2007 08 22 Lehman, Accredited, HSBC Shut Offices; Crisis Spreads2007 08 23 Fed lends $2 billion to banks to ease credit woes2007 08 29 Basis Yield Files Bankruptcy Over Subprime Defaults2007 09 06 ECB injects 250 Billion euros into markets2007 09 14 Northern Rock Gets Emergency Bank of England Funding2007 09 17 Government guarantees Northern Rock deposits2007 09 17 NovaStar Can’t Pay Dividend, Forfeits REIT Status2007 09 18 Stocks Surge on Big Fed Rate CutLosses show in earnest after Q3
2007 10 05 Merrill in $5.5bn sub-prime loss2007 10 24 Merrill Lynch Reports Loss on $8.4 Billion Writedown2007 10 31 Fed Lowers Rate by a Quarter Point to 4.5 Percent2007 11 08 Morgan Stanley takes $3.7bn hit2007 11 27 Citigroup to Sell $7.5 Billion Stake to Abu Dhabi2007 12 06 Black Humor Pervades Norway as Subprime Losses Extend to Arctic2007 12 10 UBS posts fresh $10bn writedown2007 12 10 MBIA Gets $1 Billion From Warburg Pincus, Sees Losses2007 12 10 Bank of America to Liquidate $12 Billion Cash Fund2007 12 11 U.S. rates reduced for third time2007 12 12 Florida Fund Reduced By $1.9 Billion After SIV Losses2007 12 13 World central banks agree to inject at least $100bn into inter-bank markets2007 12 14 Citigroup Rescues SIVs With $58 Billion Debt Bailout2007 12 17 $20bn from Fed to ease credit woe2007 12 18 The ECB lends over $500 billion for Christmas2007 12 19 Ambac, MBIA Outlook Lowered by S&P, ACA Cut to CCC2007 12 24 Merrill Lynch to Get $6.2 Billion From Temasek, DavisLosses after Q4 rising
2008 01 15 Citi Writes Down $18 Billion; Merrill Gets Infusion2008 01 22 As markets implode, Fed panics and cuts 75bps2008 01 28 Scandal stings not just bank, but French pride, too2008 01 30 The Federal Reserve cuts again, 50 basis points2008 02 14 UBS confirms sub-prime $18.4 billion loss2008 03 03 HSBC in $17bn credit crisis loss2008 03 06 Peloton Capital hedge fund collapses2008 03 07 Ambac Gets $1.5 Billion in Capital to Keep AAA Grade2008 03 11 Carlyle Fund Tries to Halt LiquidationBear Stearns collapses
2008 03 11 Central Banks inject $200 billion of liquidity into markets2008 03 14 JPMorgan and Fed Move to Bail Out Bear Stearns2008 03 25 Seeking Fast Deal, JPMorgan Quintuples Bear Stearns Bid2008 03 31 U.S. Treasury Backs Regulatory Overhaul, Broader Fed RoleLosses still rising in 1st Quarter 2008
2008 04 01 UBS writes down another $19 billion2008 04 01 Deutsche Bank to write down $4B2008 04 04 MBIA Loses AAA Insurer Rating From Fitch Over Capital2008 04 08 Washington Mutual Raising $7 Billion2008 04 14 Wachovia’s Loss a Grim Sign for Banks2008 04 18 Citigroup Reports Loss on $15 Billion of Credit Costs2008 04 21 Funds to invest up to $8bn in National City bank2008 04 22 Merrill Raises $9.55 Billion in Sales of Debt, Preferred Shares2008 04 22 RBS aims to raise $24B in new capital2008 04 29 Citigroup Sells $3 Billion of Stock to Boost Capital2008 04 29 HBOS Plans to Raise 4 Billion Pounds in Share Sale2008 04 30 Citigroup Increases Stock Offering to $4.5 Billion2008 05 06 Fannie Mae to raise $6bn new capital2008 05 07 Town of Vallejo, California goes bankrupt2008 05 09 Citigroup to wind down $400bn of assets2008 05 19 Banks Keep $35 Billion Markdown Off Income StatementsRenewed Concerns over losses as Q2 progresses
2008 05 26 UBS Falls After Saying More Mortgage Losses Possible2008 06 02 Morgan Stanley, Merrill, Lehman Ratings Cut by S&P2008 06 02 Bradford & Bingley shares plunge as lender warns on profits2008 06 05 MBIA, Ambac, $1 Trillion of Debt, Lose S&P AAA RatingSecond leg in write-off: more loans, fewer derivative securities
2008 06 09 Lehman Brothers to post $3 bln loss; sets $6 bln stock sale2008 06 09 Lehman to post $2.8 billion quarterly loss2008 06 09 Lehman Cuts $130 Billion of Assets to End Bear Stigma2008 06 12 KeyCorp to raise $1.5 billion, cut dividend 50%2008 06 18 Fifth Third Falls on Plan to Raise $2 Billion, Cut Dividend2008 06 25 Countrywide Sued by California Over Mortgage Loans2008 06 25 Countrywide Financial Faces Illinois Suit Over Mortgage Loans2008 06 30 Florida Sues Countrywide2008 07 07 Freddie Mac, Fannie Mae Plunge on Capital Concerns2008 07 10 U.S. Mulls Future of Fannie, FreddiePrelude to 2nd panic begins with IndyMac failure
2008 07 11 IndyMac Seized by U.S. Regulators Amid Cash Crunch2008 07 18 Barclays and HBOS cash calls shunned2007 07 25 National Australia Bank tumbles on new $830m provision2008 07 28 Merrill Has $5.7 Billion of Writedowns, Sells Shares2008 08 08 Auction-Rate Buybacks: The Bottom Line2008 08 20 Fannie Mae and Freddie Mac shares fall on fears of size of potential losses2008 08 20 Lehman’s secret talks to sell 50% stake stallPanic of 2008
2008 09 07 Paulson Engineers U.S. Takeover of Fannie, Freddie2008 09 15 Lehman Files Biggest Bankruptcy After Suitors Balk2008 09 15 Lehman Bankruptcy Summons Drexel Ghost 18 Years Later2008 09 15 Bank of America to Acquire Merrill as Crisis Deepens2008 09 15 Fed Widens Collateral, Banks Set Up $70 Billion Fund2008 09 16 Fed to lend $85 billion to AIG, take 80 percent stake2008 09 18 Lloyds TSB seals £12.2bn HBOS deal2008 09 25 WaMu Seized by U.S., Assets Sold to JPMorgan in Record FailureGovernment intervention to end panic
2008 09 29 B&B nationalisation is confirmed2008 09 29 Iceland nationalises Glitnir bank2008 10 03 Dutch part of Fortis is nationalised2008 10 06 Hypo Real Gets EU50 Billion Government-Led Bailout2008 10 07 UK makes massive rescue plan for banks2008 10 08 Fed Will Lend Directly to Corporations2008 10 12 Australia to guarantee bank deposits for three years: PM2008 10 13 RBS, HBOS and Lloyds to get $64 billion from U.K.2008 10 13 Fed Says ECB, Others to Offer Unlimited Dollar Funds2008 10 13 EU Nations Commit 1.3 Trillion Euros to Bank Bailouts2008 10 13 Germany Pledges EU500 Billion in Bank Rescue Plan2008 10 15 European central banks pump $250bn liquidity2008 10 15 EU backs emergency accounting changes2008 10 16 ECB Widens Collateral Rules, Slashes Required Ratings2008 10 16 ECB gives Hungary €5bn credit line2008 10 16 Swiss banks raise emergency funds to fight crisis2008 10 22 Wachovia reports 23.9 billion lossQ4 after the panic
2008 11 10 Wells Sells $11 Billion in Stock for Wachovia Deal2008 11 13 Ranieri’s Franklin Bank files Chapter 7 bankruptcy2008 11 19 Citigroup to Buy $17.4 Billion in SIV Assets2008 11 20 GMAC Latest to Seek Bank Status, Access to Treasury Funds2008 11 24 Citigroup Gets U.S. Rescue From Losses, Cash Infusion2008 11 25 Downey Financial files for Chapter 7 bankruptcy2008 11 26 Iceland’s Glitnir seeks protection from U.S. creditors2008 12 15 AIG sells $39.3 billion in assets to NY Fed’s fund2008 12 18 Citigroup’s Debt Lowered Two Grades to A2 by Moody’s2008 12 20 Latvia Secures 7.5 Billion Euros in IMF, EU Loans2008 12 23 American Express Will Get $3.39 Billion in TARP Funds2008 12 30 IndyMac Is Set to Be Sold to Private Investors
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Loss Estimates
2007 06 30 $250 Billion in Subprime Losses?2007 10 09 U.S. subprime losses may reach $150 billion: S&Pnews2007 11 12 Subprime Losses May Reach $400 Billion, Analysts Say2007 11 20 Subprime crisis seen spilling into 2009; Losses top out at $270 Billion 2007 11 22 U.S. subprime losses may hit $300 billion, OECD estimates2008 01 31 Subprime, CDO Bank Losses May Exceed $265 Billion2008 01 31 S&P sees more than $265 bln subprime losses2008 02 11 Credit writedowns may total $175B – analyst2008 02 29 Financial Firms Face $600 Billion of Losses, UBS Says2008 03 13 Subprime losses may reach 285 billion dollars: S&P2008 04 08 IMF says writedowns on U.S. assets could total $945bn2008 04 15 OECD raises subprime loss tally to $350-420 bln2008 04 16 OECD predicts subprime losses to hit $420bn2008 04 23 Subprime writedowns hit $269 billion2008 04 29 $800 Billion more in Subprime, Alt-A Mortgages May Head `Underwater’2008 05 14 Subprime losses by global banks total US$400 billion: Fitch2008 05 20 Credit Crisis Will Extend Into 2009, $170 bn in additional writeoffs2008 06 02 Wall Street May Face $460 Bln in Losses, Goldman Says2008 06 18 Paulson & Co. Says Writedowns May Reach $1.3 Trillion2008 07 07 Treasuries Little Changed; SonntagsZeitung Says Losses to Grow2008 08 07 Yes, That’s $2 Trillion of Debt-Related Losses2008 10 07 IMF estimates U.S. mortgage losses to hit $US1.4 trillion2008 10 28 Bank of England estimates world credit loss at ‘£1.8 trillion’2009 01 20 Roubini Predicts U.S. Losses May Reach $3.6 Trillion
Return to Index
Escalating Losses
2007 12 27 Subprime Bank Losses Reach $97 Billion, Led by Citigroup: Table2008 01 22 Subprime Bank Losses Reach $133 Billion, Led by Merrill: Table2008 01 31 Subprime Bank Losses Reach $146 Billion as Europe Joins: Table2008 02 22 Subprime Losses Reach $163 Billion With Asian Banks2008 02 29 Subprime Losses Reach $181 Billion With European Banks: Table2008 03 07 Subprime Losses Reach $188 Billion With Canada, Europe: Table2008 03 14 Subprime Losses Reach $195 Billion; German Banks Get Hit: Table2008 03 26 Subprime Losses Exceed $208 Billion With U.S. Writedowns: Table2008 04 01 Subprime Losses Reach $232 Billion With UBS, Deutsche: Table2008 04 10 Subprime Bank Losses Reach $245 Billion With WaMu, HSH: Table2008 04 28 Subprime Bank Losses Reach $312 Billion With RBS, Nomura: Table2008 05 09 Subprime Bank Losses Top $323 Billion With HBOS, Lloyds: Table2008 05 19 Subprime Losses Top $379 Billion on Balance-Sheet Marks: Table2008 06 18 Subprime Losses Top $396 Billion on Brokers’ Writedowns: Table2008 08 12 Banks’ Subprime Losses Top $500 Billion on Writedowns2008 08 20 Banks’ Subprime Market-Related Losses, Capital Raised: Table2008 08 27 Banks’ Subprime Market-Related Losses Reach $506 Billion: Table2008 09 25 Banks’ Subprime Market-Related Losses Top $523 Billion: Table2008 09 29 Banks’ Subprime-Related Losses Surge to $591 Billion: Table2008 10-28 The world’s biggest financial companies have posted more than $670 billion in writedowns and credit losses2009 01 15 Banks’ Loan Losses Could Reach $2 Trillion
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Job Losses
2008 01 24 Morgan Stanley, Lehman, Credit Suisse Cut 1,640 Jobs2008 02 26 Banks Cut More Than 28,000 Jobs as Subprime Losses Mount: Table2008 03 24 Wall Street Firms Cut 34,000 Jobs, Most Since 2001 Dot-Com Bust2008 04 22 Banks Cut 48,000 Jobs as Subprime Losses Mount: Table2008 05 06 Banks, Brokers Cut 65,000 Jobs as Subprime Losses Mount: Table2008 05 27 Banks, Brokers Cut 83,000 Jobs as Subprime Losses Mount: Table2008 09 26 Banks’ Job Cuts Reach 121,000 as Credit Woes Spread: Table
Capital Raised
2008 01 15 Citigroup, Merrill Receive $21 Billion From Investors2008 02 01 Banks Look Overseas, Markets to Raise $84 Billion2008 04 02 Banks Get $136 Billion From Governments, Private Sources: Table2008 04 16 Banks Get $163 Billion From Governments, Private Sources: Table2008 04 30 Banks Raise $231 Billion Capital as Credit Losses Surge: Table2008 06 18 Banks raise $302 Billion in Capital after Brokers’ Losses2008 07 02 Reference within article: Capital raising has topped $322 Billion2008 07 15 Reference within article: Capital raising tops $325 Billion2008 07 22 Reference within article: Capital raising at $345 Billion2008 08 12 Banks raise $353 Billion in Capital2008 08 20 Banks’ Subprime Market-Related Losses, Capital Raised: Table2008 09 29 Banks’ Capital Raised up to $434 Billion: Table
Foreclosure Estimates
2007 03 12 Foreclosures May Hit 1.5 Million in U.S. Housing Bust
Return to Index
Government intervention
2009 01 20 Bank of England governor Mervyn King paves way for quantitative easing2008 12 21 Ireland plans €7bn banking sector bail-out with Anglo Irish first in line2008 12 20 Latvia Secures 7.5 Billion Euros in IMF, EU Loans2008 12 11 South Africa Central Bank Cuts Key Rate by Half Point2008 12 11 Swiss Central Bank Cuts Rate to 0.5%, Recession Looms2008 12 11 Bank of Korea reduces rates to 3%2008 12 09 Bank of Canada Cuts Lending Rate to Lowest Since 19582008 12 07 India Unveils 3 Trillion Rupee Spending Plan By March2008 12 06 India slashes rates to shore up growth2008 12 04 Sweden cuts interest rates to 2%2008 12 04 U.K. Pound Trades Near Record Low Versus Euro as BOE Cuts Rate2008 12 04 Is the ECB dragging its heels?2008 12 03 NZ central bank makes record rate cut 2008 12 02 GAO Urges Treasury to Toughen Oversight of TARP2008 12 02 Australia: Rates slashed again, more cuts expected2008 11 29 German regional bank seeks huge bailout2008 11 26 China makes biggest rate cuts for decade2008 11 24 Hungary Unexpectedly Cuts Key Rate as Inflation Eases2008 11 20 Switzerland cuts rates by 100 basis points2008 11 12 AmEx Seeks $3.5 Billion From Government, Report Says2008 11 12 GE says gets FDIC backing for $139 billion in debt2008 11 11 Russia lifts rates to 12pc to save rouble as crisis deepens2008 11 11 Swiss Central Bank Cuts Rate to 0.5%, Recession Looms2008 11 10 Latvia takes over Parex after run on bank2008 10 29 Norway cuts rates by half a point2008 10 29 Kuwaiti Parliament Passes Law Guaranteeing All Bank Deposits2008 10 29 Fed Cuts Rate to 1% to Avert Prolonged Recession2008 10 28 EU approves German bail-out scheme2008 10 28 Iceland raises rates sharply, others poised to cut2008 10 23 Sweden Cuts Key Rate to Stimulate Lending, Economy2008 10 22 Netherlands EU200 Billion Bank Guarantee Will Last Through 20092008 10 21 Bank of Canada cuts key rate2008 10 20 India cuts key interest rate2008 10 20 Sweden launches financial rescue package2008 10 16 BOE Curbs Disclosure, Cuts Penalty to Quash Stigma2008 10 16 ECB Widens Collateral Rules, Slashes Required Ratings2008 10 16 ECB gives Hungary €5bn credit line2008 10 16 Swiss banks raise emergency funds to fight crisis2008 10 15 Iceland Cuts Key Interest Rate to 0.12 From 15.5%2008 10 15 European central banks pump $250bn liquidity2008 10 15 EU backs emergency accounting changes2008 10 13 RBS, HBOS and Lloyds to get $64 billion from U.K.2008 10 13 Fed Says ECB, Others to Offer Unlimited Dollar Funds2008 10 13 EU Nations Commit 1.3 Trillion Euros to Bank Bailouts2008 10 13 Germany Pledges EU500 Billion in Bank Rescue Plan2008 10 12 Australia to guarantee bank deposits for three years: PM2008 10 08 Fed Will Lend Directly to Corporations2008 10 08 Austria Guarantees All Deposits, Stops Short Selling2008 10 08 Federal Reserve, ECB and Bank of England make emergency interest rate cuts2008 10 07 Iceland gets $7.6b Russian loan to halt meltdown2008 10 07 Spain announces emergency fund2008 10 07 UK makes massive rescue plan for banks2008 10 06 Hypo Real Gets EU50 Billion Government-Led Bailout2008 10 05 Denmark Guarantees Deposits in 6.4 Billion Pact2008 10 05 Germany Guarantees Private Deposits in Bid to Calm Bank `Panic’2008 10 03 Dutch part of Fortis is nationalised2008 10 03 Greece joins bailout stampede as Germany vows no blank cheques2008 09 30 Irish government guarantees bank deposits2008 09 29 B&B nationalisation is confirmed2008 09 29 Iceland nationalises Glitnir bank2008 09 25 WaMu Seized by U.S., Assets Sold to JPMorgan in Record Failure2008 09 16 Fed to lend 85 billion to AIG, take 80 percent stake2008 09 15 Fed Widens Collateral, Banks Set Up 70 Billion Fund2008 09 07 Paulson Engineers U.S. Takeover of Fannie, Freddie2008 05 07 Town of Vallejo, California goes bankrupt2008 03 31 US Treasury Backs Regulatory Overhaul, Broader Fed Role2008 03 11 Central Banks inject 200 billion of liquidity into markets2008 01 30 The Federal Reserve cuts again, 50 basis points2008 01 22 As markets implode, Fed panics and cuts 75bps2007 12 18 The ECB lends over 500 billion for Christmas2007 12 17 $20bn from Fed to ease credit woe2007 12 13 World central banks agree to inject at least $100bn into inter-bank markets2007 12 12 Florida Fund Reduced By 1.9 Billion After SIV Losses2007 12 11 US rates reduced for third time2007 10 31 Fed Lowers Rate by a Quarter Point to 4.5 Percent2007 09 18 Stocks Surge on Big Fed Rate Cut2007 09 17 Government guarantees Northern Rock deposits2007 09 14 Northern Rock Gets Emergency Bank of England Funding2007 09 06 ECB injects 250 Billion euros into markets2007 08 23 Fed lends 2 billion to banks to ease credit woes2007 08 17 Fed Cuts Discount Rate to 5.75% to Ease Credit Crunch Credit Crisis Timeline10.0102
