8 February 2007:
HSBC WARNS OF SUBPRIME LOSSES
HSBC reveals huge losses at its US mortgage arm Household Finance due to subprime losses, in one of the first signs that the US housing market is turning sour, and that it could have a knock-on effect on the global financial sector.

2 April 2007:
NEW CENTURY GOES BUST
New Century Financial, a leading subprime lender, files for bankruptcy. It is the first signal that something is seriously amiss at US mortgage lenders. Shares in other US mortgage banks like Countrywide come under pressure.

9 August 2007:
CREDIT MARKETS FREEZE
Credit markets go into freefall after Paribas announces that two of its hedge funds are frozen due to ‘complete evaporation of liquidity’ in asset-backed security market. European Central Bank injects €170bn into the banking market and Fed lowers interest rates. Bank of England refuses to intervene in credit markets.

14 September 2007:
ROCK BOTTOM
Savers in beleaguered UK former building society Northern Rock begin withdrawing their savings after the news that the bank has received emergency financial support from the Bank of England.

17 March 2008:
BEAR STEARNS RESCUE
US investment bank Bear Stearns is rescued by rival bank JP Morgan Chase after the US government provides a $30bn guarantee against its mounting losses. It is the first sign that, rather than easing, the financial crisis is getting worse, but investors are relieved that the US government is prepared to act as lender of last resort.

7 September 2008:
FANNIE MAE RESCUE
US government rescues giant mortgage lenders Fannie Mae and Freddie Mac, taking them into temporary public ownership after they reveal huge losses on the US subprime mortgage market.

15 September 2008:
LEHMAN BROTHERS GOES BANKRUPT
US investment bank Lehman Brothers goes bankrupt after the US government refuses to bail it out. Merrill Lynch is bought by Bank of America after revealing it is also facing huge losses. Insurance firm AIG, which issued credit guarantees for subprime mortgages, is rescued the next day with an $85bn loan from US Treasury.

17 September 2008:
LLOYDS TAKES OVER HBOS
Lloyds agrees a £12.2bn takeover of the ailing Halifax Bank of Scotland (HBOS), the UK’s largest mortgage lender, after its shares plummet amid concerns over the firm’s future.

3 October 2008:
$700BN BAILOUT APPROVED BY CONGRESS
The biggest financial rescue in US history is approved after a debate in Congress, and initial defeat a week earlier. Republicans and Democrats alike were reluctant to bail out the banks with such large sums while ordinary citizens were suffering in the recession. Both presidential candidates endorse the bailout.

13 October 2008:
UK GOVERNMENT RESCUES RBS AND LLOYDS-HBOS
Two of the UK’s major banks, RBS and HBOS, are in major trouble as financial markets collapse. Having merged with HBOS in September, Lloyds is hit by the huge debts built up by its new partner in the mortgage market, while RBS is struggling with its expensive merger with ABN-AMRO. The UK government injects £37bn to stabilise both banks.

16 December 2008:
FED CUTS KEY RATE TO NEAR ZERO
The US central bank cuts its interest rate to 0 - 0.25% in an attempt to stem the deepening recession, and begins to consider a programme of quantitative easing to throw money into the economy to help make borrowing easier. It is the lowest interest rate in the history of the Fed.

14 February 2009:
US CONGRESS PASSES $787BN STIMULUS
President Obama wins his first major victory in Congress as it passes a huge economic recovery plan aimed at preventing the US falling into recession as a result of the credit crunch. Much of the money will go to the states to prevent them laying off public sector workers, but some will be invested in infrastructure projects like roads, schools and green energy.

2 April 2009:
G20 SUMMIT IN LONDON
World leaders pledge an additional $1.1trn to help emerging market countries and promise coordinated action to fight the slump and improve regulation. Gordon Brown emerges triumphant from a global summit, which he claims is a turning point in the crisis, and stock markets begin to revive. However, not all the money pledged is actually delivered.

22 April 2009:
UK BUDGET REVEALS HUGE DEFICIT
The UK Chancellor Alistair Darling reveals that the credit crunch will lead to the largest budget deficit in UK financial history of £175bn, with total government debt set to double to £1trn by 2014. Mr Darling admits it will take two Parliaments, or 10 years to get the budget back to the position it was in before the credit crunch.

Bottoming out ...
24 September 2009:
RETURN TO GROWTH
The European Commission forecasts that the eurozone’s economy has returned to growth in the current quarter. It says that the single currency economy may expand by 0.2% in the third quarter and by 0.1% in the fourth quarter.