► 2007 :

● August : worldwide “ credit crunch” as sub prime mortgage backed securities are
discovered in portfolios of banks and hedge funds around the world. Federal Reserve
injects about US$100bil into the money market for banks to borrow at a low rate.

● Aug 17: The Fed lowers the discount rate by 50 basis points to 5.75% from 6.25%.

● Aug 31 : President George W Bush announces a limited bailout of US homeowners
unable to pay the rising costs of their debts. Ameriquest, once the largest sub prime
lender in the US, goes out of business.

● Sept 1-3: Fed Economic Symposium in Jackson Hole, Wyoming addressed the
housing recession that jeopardised US growth. Several critics argued that the Fed
should use regulation and interest rates to prevent asset-price bubbles.

● Sept 18: The Fed lowers interest rates by half a point (0.5%).

● Oct 10: Hope Now Alliance was created by the US government and private industry to
help some sub-prime borrowers.

● Oct 15-17: A consortium of US banks backed by the US government announced a
“super fund” of US$100bil to purchase mortgage-backed securities whose mark-to
market value plummeted in the sub prime collapse.

● Oct 31: The Fed lowers the federal funds rate by 25 basis points to 4.5%.

● Nov 1: The Fed injects US$41bil into the money market for banks to borrow at a low
rate, the largest single expansion by the Fed since US$50.35bil was injected on Sept
19,2001.

● Dec 6: President Bush announced a plan to voluntarily and temporarily freeze the
mortgages of a limited number of mortgage debtors holding adjustable rate mortgages
(ARM).



► 2008 :

● Mar 16: Bear Stearns is acquired by JPMorgan Chase initially for US$2 a share but
later revised to a higher price in a fire sale avoiding bankruptcy. The deal is backed by
The Fed providing up to US$30bil to cover possible Bear Stearn losses.

● Sept 7: Federal takeover of Fannie Mae and Freddie Mac.

● Sept 17: The Fed loans US$85bil to American International Group (AIG) to avoid
bankruptcy.

● Sept 19: Treasury secretary Henry Paulson financial rescue plan unveiled after a
volatile week in stock and debt markets.

● Sept 25 : Washington Mutual is seized by the Federal Deposit Insurance Corp, and its
banking assets sold to JP MorganChase for US$1.9bil.

● Sept 29 : Emergency Economic Stabilization Act defeated 228-205 in the US House of
Representatives.

● Sept 29: Federal Deposit Insurance Corp announces that Citigroup Inc. would acquire
banking operations of Wachovia.

● Oct 1 : The US Senate passes HR1424, their version of the bailout bill.