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Post-Crisis Use of Financial Market Data in Bank Supervision - Timeline

Select Events from Mid-2007 to Mid-2012

Published October 25, 2012  |  October 2012 issue

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April 2007

  • New Century Financial Corporation files for Chapter 11 bankruptcy (April 2).

June 2007

  • Bear Stearns suspends redemptions from its High Grade
  • Structured Credit Strategies Enhanced Leverage Fund (June 7).

July 2007

  • Bear Stearns liquidates two hedge funds that invested in various types of mortgage-backed securities (July 31).

Table 1: Thresholds Results in the Pre-Crisis Period

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August 2007

  • The FOMC votes to maintain its target for the federal funds rate at 5.25 percent (Aug. 7).
  • BNP Paribas halts redemptions on three investment funds (Aug. 9).
  • The Federal Reserve Board announces that “in current circumstances, depository institutions may experience unusual funding needs because of dislocations in money and credit markets” (Aug. 10).

September 2007

  • Ben BernankeThe FOMC votes to reduce its target for the federal funds rate 50 basis points to 4.75 percent (Sept. 18).

November 2007

  • Financial market pressures intensify, reflected in diminished liquidity in interbank funding markets.

December 2007

  • The Federal Reserve Board announces the creation of a Term Auction Facility (TAF) (Dec. 2).

January 2008

  • Bank of America announces purchase of Countrywide Financial (Jan.11).

March 2008

  • The Federal Reserve Bank of New York announces financing to facilitate JPMorgan Chase’s acquisition of Bear Stearns (March 24).

July - August 2008

  • Fannie MaeThe Office of Thrift Supervision closes IndyMac Bank (July 11).
  • The Treasury Department announces additional support for Fannie Mae and Freddie Mac (July 13).
  • The FOMC releases a statement about the current financial market turmoil (Aug. 17).

September 2008

  • The Federal Housing Finance Agency (FHFA) places Fannie Mae and Freddie Mac in government conservatorship (Sept. 7).
  • Bank of America announces its intent to purchase Merrill Lynch for $50 billion and Lehman Brothers files for bankruptcy (Sept. 15).
  • The Federal Reserve Bank of New York lends up to $85 billion to the American International Group (AIG) and the Reserve Primary Fund “breaks the buck” (Sept. 16).
  • Goldman Sachs and Morgan Stanley approved to be bank holding companies by the Federal Reserve (Sept. 21).
  • JPMorgan Chase acquires the banking operations of Washington Mutual with assistance from the FDIC (Sept. 25).

Table 2: Thresholds Results in the Crisis Period

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October - November 2008

  • The Treasury Department announces that the Troubled Asset Relief Program (TARP) will purchase capital in financial institutions (Oct. 14).
  • PNC Financial Services purchases National City Corporation (Oct 24).
  • The U.S. Treasury Department, Federal Reserve and FDIC jointly announce support for Citigroup (Nov. 23).
  • The Federal Reserve creates the Term Asset-Backed Securities Lending Facility (TALF) (Nov. 25).

January - February 2009

  • The Treasury, Federal Reserve and FDIC announce support for Bank of America (Jan. 16).
  • The federal bank regulatory agencies introduce the Supervisory Capital Assessment Program (SCAP) or “stress test” (Feb. 25).

May 2009

  • The results of the SCAP exercise are released to the public (May 7).

December 2009

  • Greek debt is downgraded by Fitch Ratings, and S&P warns about future downgrades (Dec. 10).

February 2010

  • Several special lending facilities started by the Federal Reserve during the crisis expire (Feb. 1).

Table 3: Thresholds Results in the Post-Crisis Period

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April - May 2010

  • 10-year Greek bond yields rise above 9% in the secondary market by the end of April. The European Union (EU) and the IMF agree to a EUR 100 billion bailout package for Greece on May 2.
  • The EU decides on a comprehensive package of measures to preserve financial stability in Europe, including a European Financial Stabilization mechanism with a total volume of up to EUR 500 billion (May 10).

November 2010

  • 10-year Irish bond yields rise above 9% in the secondary market by the end of November. The EU and the IMF agree to a EUR 85 billion bailout package for Ireland on May 29.

April - May 2011

  • Portugal formally requests a bailout on April 6. 10-year Portuguese bond yields continue to rise to 10% during May. The EU and IMF agree to a EUR 78 billion bailout for Portugal on May 16.

July 2011

  • The EU and the IMF agree to release funds promised to Greece under the May 2010 bailout package and agree to prepare a second aid package.

August 2011

  • Euro10-year bond yields for Italy and Spain both rise above 6% in early August. The European Central Bank says it will buy government bonds from these countries to try to bring down their borrowing costs.

October 2011

  • Belgium, France and Luxembourg agree to bail out the troubled bank Dexia. European banks are told to raise more capital.
  • European leaders obtain an agreement from banks to take a 50% loss on the face value of their Greek bonds as part of a plan to restructure Greece’s debt.

July 2012

  • The president of the European Central Bank says the institution will do “whatever it takes” to preserve the euro.

Source: Federal Reserve Bank of St. Louis, The Financial Crisis Timeline


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Table 1: Thresholds Results in the Pre-Crisis Period

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Table 2: Thresholds Results in the Crisis Period

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Table 3: Thresholds Results in the Post-Crisis Period

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