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Page last updated at = 14:00 GMT,=20 Tuesday, 14 October 2008 15:00 UK

E-mail this to a = friend

Printable version=20 =

Timeline: Global credit crunch

A quick guide to the origins of the global financial=20 crisis.

FINANCIAL CRISIS: HOW IT = HAPPENED

=20

Most analysts link the current credit = crisis to=20 the sub-prime mortgage business, in which US banks give = high-risk=20 loans to people with poor credit histories.
These and = other=20 loans, bonds or assets are bundled into portfolios - or=20 Collateralised Debt Obligations (CDOs) - and sold on to = investors=20 globally.

=20

Falling house prices and rising = interest rates=20 lead to high numbers of people who cannot repay their = mortgages.=20 Investors suffer losses, making them reluctant to take on = more CDOs.=20 Credit markets freeze as banks are reluctant to lend to each = other,=20 not knowing how many bad loans could be on their rivals'=20 books.

=20

The impact of the sub-prime mortgage = crisis is=20 quickly shown to have implications beyond the United States. = Losses=20 are felt by investment banks as far afield as Australia. = Firms=20 cancel sales of bonds worth billions of dollars, citing = market=20 conditions.

=20

The US Federal Bank and the European = Central=20 Bank tries to bolster the money markets by making funds = available=20 for banks to borrow on more favourable terms.
Interest = rates are=20 also cut in an effort to encourage lending.

=20

But the short-term help does not solve = the=20 liquidity crisis - or availability of cash for banks - as = banks=20 remain cautious about lending to each other.
A lack of = credit -=20 to banks, companies and individuals - brings with it the = threat of=20 recession, job losses, bankruptcies, repossessions and a = rise in=20 living costs.

=20

UK bank Northern Rock seeks an = emergency loan to=20 stay afloat, prompting a "run" on the bank, as worried = customers=20 withdraw =A32bn. The bank is later nationalised. In the US, = the=20 near-collapse of Bear Stearns leads to a crisis of = confidence in the=20 financial sector and the end of investment-only = banks.

=20

Seeking a long-term solution, the US = government=20 agrees a $700bn bail-out that will buy up Wall Street's bad = debts in=20 return for stake in the banks. The US government plans to = borrow the=20 money from world financial markets and hopes it can sell the = distressed assets back once the housing market has = stabilised.=20

=20

The UK government launches its own = bail-out,=20 making =A3400bn extra capital available to eight of the UK's = largest=20 banks and building societies in return for preference shares = in=20 them. In return for its investment, the government expects = to get a=20 stake in the banks - although exactly how much is not quite = clear=20 yet.

=20

Economies around the world are = affected by the=20 credit crunch. Governments move to nationalise banks from = Iceland to=20 France. Central banks in the US, Canada and some parts of = Europe=20 take the unprecedented step of co-ordinating a half-point = percent=20 cut in interest rates in an effort to ease the = crisis.

=20

Shares have risen and fallen with news = of=20 failures, takeovers and bail-outs. In part, this reflects = investors'=20 confidence in the banking system. While bank shares have = been=20 hammered because of bad debts, retailers have been hit as = consumer=20 confidence is shaken by falling house prices and job=20 insecurity.

BACK

1 of 10

The full story...=20

A year ago, few people had heard of the term credit = crunch,=20 but the phrase has now entered dictionaries.=20

Defined as "a severe shortage of money or credit", the = start of=20 the phenomenon has been pinpointed as 9 August 2007 when bad = news=20 from French bank BNP Paribas triggered sharp rise in the = cost of=20 credit, and made the financial world realise how serious the = situation was.=20

The problems, however, started much earlier.=20

GROWING SUB-PRIME PROBLEMS

After a two year period between 2004 and 2006 when US = interest=20 rates rose from 1% to 5.35%, the US housing market begins to = suffer,=20 with prices falling and a rise in homeowners defaulting on = their=20 mortgages.=20

Default rates on sub-prime loans - high risk loans to = clients=20 with poor or no credit histories - rise to record levels.=20

APRIL-AUGUST 2007: SUB-PRIME CONTAGION =

April=20

3D""
3D"Wall

3D""=20 The credit losses associated = with=20 sub-prime have come to light and they are fairly=20 significant...Some estimates are in the order of = between $50bn=20 and $100bn of losses 3D""=20

Ben Bernanke, Chairman US Federal Reserve, = speaking on 20=20 July 2007

New Century Financial, which specialises in sub-prime = mortgages, files for=20 Chapter 11 bankruptcy protection and cuts half of its = workforce.=20

As it sold on many of its debts to other banks, the = collapse in=20 the sub-prime market begins to have an impact at banks = around the=20 world.=20

July=20

Investment bank Bear Stearns tells investors they will = get=20 little, if any, of the money invested in two of its hedge = funds=20 after rival banks refuse to help it bail them out.=20

Federal Reserve chairman Ben Bernanke follows the news = with a = warning=20 that the US sub-prime crisis could cost up to $100bn = (=A350bn).=20

AUGUST 2007: SCALE OF THE CREDIT CRISIS=20 EMERGES

9 August 2007=20

3D""
3D"BNP

3D""=20 BNP's statement is scary, to = put it=20 mildly 3D""=20

BBC Business Editor, Robert Peston

3D""

Read=20 Robert's 9 August blog

BNP=20 Paribas'=20 statement

Investment bank BNP Paribas tells investors they will not = be able=20 to take money out of two of its funds because it cannot = value the=20 assets in them, owing to a "complete evaporation of = liquidity" in=20 the market.=20

It is the clearest sign yet that banks are refusing to do = business with each other.=20

The European Central Bank pumps 95bn=20 euros (=A363bn) into the banking market to try to improve=20 liquidity. It adds a further 108.7bn euros over=20 the next few days.=20

The US Federal Reserve, the Bank of Canada and the Bank = of Japan=20 also begin to intervene.=20

17 August=20

The = Fed cuts=20 the rate at which it lends to banks by = half of a=20 percentage point to 5.75%, warning the credit crunch could = be a risk=20 to economic growth.=20

21 August=20

UK sub-prime lenders begin to withdraw mortgages or put = up the=20 cost of borrowing for UK homeowners with poor credit = histories.=20

28 August=20

German regional bank Sachsen Landesbank faces collapse = after=20 investing in the sub-prime market; it = is sold to=20 larger rival Landesbank Baden-Wuerttemberg.=20

SEPTEMBER 2007: A RUN ON A = BANK

3 September=20

German corporate lender IKB announces a=20 $1bn loss on investments linked to the US sub-prime = market.=20

4 September=20

The rate at which banks lend to each other rises to its = highest=20 level since December 1998.=20

The so-called Libor rate is=20 6.7975%, way above the Bank of England's 5.75% base = rate; banks either worry whether other banks will=20 survive, or urgently need the money themselves.=20

13 September=20

3D""
3D"Northern

3D""=20 The fact that it has had to = go cap in=20 hand to the Bank is the most tangible sign that the = crisis in=20 financial markets is spilling over into businesses = that touch=20 most of our lives 3D""=20

Robert Peston, BBC business editor

3D""

Read=20 Robert's 13 September=20 blog

The BBC reveals Northern Rock has asked for and been granted=20 emergency financial support from the Bank of = England, in the latter's role as lender of last=20 resort.=20

Northern Rock relied heavily on the markets, rather than = savers'=20 deposits, to fund its mortgage lending. The onset of the = credit=20 crunch has dried up its funding.=20

A day later depositors withdraw =A31bn in what is the = biggest=20 run on a British bank for more than a century.=20 They continue to take out their money until the government = steps in=20 to guarantee their savings.=20

18 September=20

The US Federal Reserve cuts its main=20 interest rate by half a percentage point to 4.75%.=20

19 September=20

After previously refusing to inject any funding into the = markets,=20 the = Bank of=20 England announces that it will auction =A310bn.=20

OCTOBER 2007: MAJOR LOSSES BEGIN TO=20 EMERGE

1 October=20

Swiss bank UBS is the world's first top-flight bank to = announce=20 losses - $3.4bn - from sub-prime related = investments.=20

The chairman and chief executive of the bank step down. = Later,=20 banking giant Citigroup unveils a sub-prime related loss of = $3.1bn.=20 A fortnight on Citigroup is forced to write down a further = $5.9bn.=20 Within six months, its stated losses amount to $40bn.=20

30 October=20

Merrill Lynch's chief resigns after=20 the investment bank unveils a $7.9bn exposure to bad = debt.=20

NOVEMBER 2007: UK HOUSING MARKET 'TURNS=20 DOWN'

29 November=20

The Bank of England reveals the=20 number of mortgage approvals has fallen to a near three-year = low.=20

30 November=20

The Council for Mortgage Lenders (CML) issues the=20 starkest warning yet of the impact of the credit crunch on = the=20 mortgage market, saying that without more = funding=20 available on financial markets, mortgage lenders will not be = able to=20 offer as many mortgages.=20

DECEMBER 2007: HELP IS AT HAND

6 December=20

US President George W Bush outlines=20 plans to help more than a million homeowners facing = foreclosure.=20

The Bank of England cuts interest rates by a quarter of = one=20 percentage point to 5.5%.=20

13 December=20

The US Federal Reserve co-ordinates=20 an unprecedented action by five leading central banks around = the=20 world to offer billions of dollars in loans to = banks.=20

The Bank of England calls it an attempt to "forestall any = prospective sharp tightening of credit conditions". The move = succeeds in temporarily lowering the rate at which banks = lend to=20 each other.=20

17 December=20

The central banks continue to make more funding = available.=20

There is a=20 $20bn auction from the US Federal Reserve and,=20 the following day, $500bn from the European Central Bank to = help=20 commercial banks over the Christmas period.=20

NEXT UP: THE BOND INSURERS

19 December=20

Ratings agency Standard and Poor's downgrades its = investment=20 rating of a number of so-called monoline insurers, which = specialise=20 in insuring bonds. They guarantee to repay the loans if the = issuer=20 goes bust.=20

There is concern that insurers will not be able to pay = out,=20 forcing banks to announce another big round of losses.=20

9 January 2008=20

The World Bank predicts that=20 global economic growth will slow in 2008, = as the=20 credit crunch hits the richest nations.=20

18 January=20

A rush to withdraw money from its commercial property = funds forces=20 Scottish Equitable to introduce delays of up to 12 months = for investors wanting to take their money out.=20

It blames the rush of withdrawals on concerns about the = US=20 sub-prime mortgage collapse, recession worries and interest = rates.=20

21 January=20

Global stock markets, including London's FTSE 100 index, = suffer their=20 biggest falls since 11 September 2001.=20

22 January=20

The US Fed cuts rates by=20 three quarters of a percentage point to 3.5% -=20 its biggest cut in 25 years - to try and prevent the economy = from=20 slumping into recession.=20

It is the first emergency cut in rates since 2001. Stock = markets=20 around the world recover the previous day's heavy losses.=20

31 January=20

A major bond insurer MBIA, announces a=20 loss of $2.3bn - its biggest to date for a three-month = period -blaming its exposure to the US sub-prime=20 mortgage crisis.=20

FEBRUARY - MARCH 2008: BIG NAME=20 CASUALTIES

7 February=20

US Federal Reserve boss Ben = Bernanke=20 adds his voice to concerns about monoline insurers, saying he is closely monitoring developments=20 "given the adverse effects that problems of financial = guarantors can=20 have on financial markets and the economy".=20

The Bank of England cuts interest rates by a quarter of = one=20 percent to 5.25%.=20

8 February=20

3D""
3D"Stockmarket

3D""=20 Some investors forgot the = golden rule of=20 financing: 'Don't buy things that you don't = understand'=20 3D""=20

FSA chief executive Hector Sants, speaking on 27=20 February

In the UK, the latest CML = figures=20 show the number of homes repossessed in the UK rose to = 27,100 in=20 2007, its highest level since 1999.=20

10 February=20

Leaders from the G7 group of industrialised nations say = worldwide=20 losses stemming from the collapse of the US sub-prime = mortgage=20 market could reach $400bn.=20

17 February=20

After considering a number of private sector rescue = proposals,=20 including from Richard Branson's Virgin Group, the = government announces that struggling Northern Rock is to be=20 nationalised for a temporary period.=20

7 March=20

In its biggest intervention yet, the = Federal=20 Reserve makes $200bn of funds available to banks and other=20 institutions to try to improve liquidity = in the=20 markets.=20

17 March=20

Wall Street's fifth-largest bank, Bear Stearns,=20 is acquired by larger rival JP Morgan Chase for $240m = in a deal backed by $30bn of central bank loans.=20

A year earlier, Bear Stearns had been worth =A318bn.=20

28 March=20

Nationwide predicts UK=20 house prices will fall by the end of the year,=20 revising its previous forecast of no change in prices.=20

APRIL 2008: THE 100% MORTGAGE IS = CONSIGNED TO=20 HISTORY

2 April=20

Moneyfacts, which monitors financial products, says 20% of=20 mortgage products have been withdrawn from the UK market = in the previous seven days.=20

3D""
3D"For

3D""=20 I have a deep sense of shock = at how=20 deeply our successful industry has already been hit by = these=20 unprecedented funding market conditions 3D""=20

Steven Crawshaw, chairman of the Council for = Mortgage=20 Lenders, speaking on 11 April=20 2008

Five days later the 100% mortgage disappears when=20 Abbey=20 withdraws the last home loan available without a = deposit.=20

8 April=20

The International Monetary Fund (IMF), which oversees the = global=20 economy, warns that=20 potential losses from the credit crunch could reach $1 = trillion and=20 may be even higher.=20

It says the effects are spreading from sub-prime mortgage = assets=20 to other sectors, such as commercial property, consumer = credit, and=20 company debt.=20

10 April=20

The Bank of England cuts interest rates by a quarter of = one=20 percent to 5%.=20

11 April=20

A warning is issued by the CML that the amount of funding = available for mortgages in the UK could be cut in half this = year.=20

It = calls on=20 the Bank of England to kick-start the money markets and ease = the=20 effects of the credit crunch.=20

3D""
3D"A

3D""=20 The effects of the credit = crunch are=20 likely to be broader, deeper and more protracted than=20 previously expected 3D""=20

IMF global stability report, 8 April=20 2008

15 April=20

Confidence in the UK housing market falls to its=20 lowest point in 30 years in March, = according to=20 the Royal Institution of Chartered Surveyors, because of the = "unique=20 liquidity blight".=20

But it does add that the situation is good news for = buyers with=20 large deposits who can buy property that was previously out = of=20 reach.=20

21 April=20

The Bank of England announces details of an ambitious=20 =A350bn plan designed to help credit-squeezed banks by allowing them to swap potentially risky=20 mortgage debts for secure government bonds.=20

APRIL - JUNE 2008: BANKS PASS ROUND THE=20 HAT

22 April=20

Royal Bank of Scotland announces a=20 plan to raise money from its shareholders with a=20 =A312bn rights issue - the biggest in UK corporate history.=20

The firm also announces a write-down of =A35.9bn on the = value of=20 its investments between April and June - the largest = write-off yet=20 for a British bank.=20

25 April=20

Persimmon becomes the = first UK=20 house builder to announce major cutbacks, = citing=20 the lack of affordable mortgages and a fall in consumer = confidence.=20

It adds sales have fallen by a quarter since the = beginning of the=20 year.=20

3D""
3D"New

3D""=20 Because of the uncertainties = in the=20 global economy and the UK lending environment, it is = difficult=20 to predict when the [housing] market will improve =

House builder Persimmon

3D""

Read=20 the full story from 25 April=20

29 April=20

The CML says the = number of=20 new mortgages approved in March slipped 44% to=20 64, the lowest monthly number since = records began=20 in 1999.=20

30 April=20

The first annual fall=20 in house prices for 12 years is recorded = by=20 Nationwide.=20

Prices were 1% lower in April compared to a year earlier = after a=20 "steep decline" in home buying over the previous six months. =

Later in the week, figures from the UK's biggest lender = Halifax,=20 show a 0.9% annual fall for April.=20

2 May=20

More than 850 = companies=20 went into administration between January and March, government figures show, a rise of 54% on the=20 previous year. Retail and construction firms are hardest = hit.=20

22 May=20

Swiss bank UBS, one of the worst affected by the credit = crunch, launches a=20 $15.5bn rights issue to cover some of the = $37bn=20 it lost on assets linked to US mortgage debt.=20

19 June=20

There are significant developments in two major credit=20 crunch-related investigations in the US, which it is hoped = will=20 restore confidence in the credit markets.=20

The FBI arrests 406=20 people, including brokers and housing developers, as part of a crackdown on alleged mortgage frauds=20 worth $1bn.=20

Separately, two = former=20 Bear Stearns workers face criminal charges related to the = collapse=20 of two hedge funds linked to sub-prime = mortgages.=20

It is alleged they knew of the funds' problems but did = not=20 disclose them to investors, who lost a total of $1.4bn.=20

25 June=20

Barclays announces=20 plans to raise =A34.5bn in a share issue to bolster=20 its balance sheet.=20

The Qatar Investment Authority, the state-owned = investment arm of=20 the Gulf state, will invest =A31.7bn in the British bank, = giving it a=20 7.7% share in the business. A number of other foreign = investors=20 increase their existing holdings.=20

JULY 2008: MAJOR LENDERS ON THE = EDGE

8 July=20

The gloomy findings of a survey of its members prompt the=20 British Chambers of Commerce (BCC) to suggest that the UK is = facing=20 a serious risk of recession within = months.=20

Meanwhile, the FTSE 100 stock index briefly dips into a = "bear=20 market", in which the market suffers a 20% fall from its = recent=20 highs.=20

3D""

3D""=20 The outlook is grim and we = believe that=20 the correction period is likely to be longer and = nastier than=20 expected 3D""=20

British Chambers of Commerce, 18 July = 2008

3D""

Read=20 the full=20 story

13 July=20

US = mortgage=20 lender IndyMac collapses - the = second-biggest=20 bank in US history to fail.=20

14 July=20

Financial authorities step in to=20 assist America's two largest lenders, Fannie Mae and Freddie = Mac.=20 As owners or guarantors of $5 trillion = worth of=20 home loans, they are crucial to the US housing market and=20 authorities agree they could not be allowed to fail.=20

The previous week, there had been a panic amongst = investors that=20 they might collapse, causing their share prices to plummet.=20

21 July=20

Just 8% = of HBOS=20 investors agree to take up the new shares offered in its = =A34bn rights=20 issue, because they are priced higher = than=20 existing shares are trading on the stock market.=20

But HBOS still gets the =A34bn it wanted, as the unsold = new shares=20 are bought by the issue's underwriters.=20

31 July=20

UK house prices show their=20 biggest annual fall since the Nationwide began its housing = survey in=20 1991, a decline of 8.1%.=20

The average home now costs =A3169,316. That is nearly = =A315,000=20 cheaper than in the same month last year.=20

Meanwhile, HBOS reveals that profits for the first half = of the=20 year sank 72% to =A3848m, while bad debts rose 36% to = =A31.31bn as=20 customers failed to repay loans.=20

AUGUST - SEPTEMBER 2008: GIANTS = SUFFER

4 August=20

Global banking giant HSBC warned that=20 conditions in financial markets are at their toughest "for = several=20 decades" after suffering a 28% fall in = half-year=20 profits.=20

Of Europe's top banks, HSBC has among the heaviest = exposure to=20 the troubled US housing and credit markets.=20

22 August=20

The bad news continues with revised figures from the ONS=20 revealing that the UK economy is a standstill.=20

28 August=20

Nationwide reveals that UK house prices have fallen by = 10.5% in a=20 year.=20

A day later Bradford and=20 Bingley posts losses of =A326.7m for the first half of 2008, = blaming surging mortgage arrears for a rise in=20 impairment.=20

Looking ahead, it warned it expected arrears to remain at = high=20 levels for the rest of the year.=20

30 August=20

Chancellor Alistair Darling warns that=20 the economy is facing its worst crisis for 60 years in an interview with the Guardian=20 newspaper, saying the current downturn would be more = "profound and=20 long-lasting" than most had feared.=20

1 September=20

Official figures from the Bank of England show a slump in = approved mortgages for July.=20

Meanwhile, while the = pound=20 falls to record lows of 81.21 pence against the euro and two-year lows of $1.80.=20

2 September=20

In an effort to kick-start the UK housing market=20 the=20 Treasury announces a one year rise in stamp duty = exemption, from =A3125,000 to =A3175,000.=20

But there is more bad news, as the Organisation for = Economic=20 Cooperation and Development forecasts that the UK will be in = a full=20 blown recession by the end of the next two quarters. A day = later the=20 European central bank cuts growth forecast 2009 to 1.2% from = 1.5%.=20

4 September=20

The Bank of England leaves rates on hold at 5% while the = latest=20 figures from the Halifax show that house prices in England = and Wales=20 continue to fall.=20

5 September=20

A raft of negative news from around the world sees the FTSE=20 notch up its steepest weekly decline since July = 2002.=20

The US labour market figures - which showed the = unemployment rate=20 rising to 6.1% - were a further jolt to investors who have = had to=20 swallow a slew of poor economic data in recent days.=20

6 September=20

The Halifax warns that=20 the impact of the credit crunch will be felt well into = 2010. Chief executive Andy Hornby explains that=20 British banks will continue to suffer major problems in = offering=20 loans until they can raise significant sums on wholesale = markets,=20 something that will not be possible until US house prices = recover.=20

7 September=20

Mortgage lenders Fannie Mae and Freddie Mac - which = account for=20 nearly half of the outstanding mortgages in the US -=20 are = rescued=20 by the US government in one of the largest bailouts in US=20 history.=20

Treasury Secretary Henry Paulson says the two firms' debt = levels=20 posed a "systemic risk" to financial stability and that, = without=20 action, the situation would get worse.=20

At the same time, in the UK, the Nationwide announces it = will=20 merge with two smaller rivals, the Derbyshire and Cheshire = Building=20 Societies.=20

9 September=20

More bad news emerges for the UK economy as the ONS = reveals=20 manufacturing output fell by 0.2% between June and July, = raising a=20 real fear of recession.=20

Meanwhile, the British Retail Consortium reports UK = retail sales=20 values fell by 1.0% on a like-for-like basis from August = 2007.=20

On the housing front, there were more negative headlines = with the=20 Royal Institute of Chartered Surveyors published=20 figures showing house sales were at their lowest level for = 30=20 years, while the CML reported that the = number of=20 first-time buyers has hit its lowest level since its survey = began in=20 January 2002.=20

10 September=20

Wall Street bank Lehman Brothers posts a loss of $3.9bn = for the=20 three months to August.=20

The announcement comes against a background of further = dire=20 economic warnings from the European Commission, which warned that=20 the UK, Germany and Spain will go into recession by the end = of the=20 year.=20

15 September=20

After days of searching frantically for a buyer,=20 Lehman=20 Brothers files for Chapter 11 bankruptcy protection, becoming the first major bank to=20 collapse since the start of the credit crisis.=20

Former Federal Reserve chief Alan Greenspan dubs failure = as=20 "probably a once in a century type of event" and warns that = other=20 major firms will also go bust.=20

Meanwhile fellow US bank Merrill=20 Lynch, also stung by the credit crunch, agreed to be taken = over by=20 Bank of America for $50bn, the latest = twist in a=20 dramatic turn of events on Wall Street.=20

16 September=20

The US Federal Reserve announces an=20 $85bn rescue package for AIG, the country's biggest = insurance=20 company, to save it from bankruptcy. AIG = gets the=20 loan in return for an 80% public stake in the firm.=20

17 September=20

Britain's biggest mortgage lender HBOS is taken=20 over by Lloyds TSB in a =A312bn deal = creating a=20 banking giant holding close to one-third of the UK's savings = and=20 mortgage market. The deal follows a run on HBOS shares.=20

25 September=20

In the largest bank failure yet in the United States, = Washington=20 Mutual, the giant mortgage lender which had assets valued at = $307bn=20 is closed down=20 by regulators and sold to its JPMorgan Chase.=20

The group was hit by mortgage defaults the collapse of = the US=20 housing market after its expansion into sub-prime lending.=20

28 September=20

The credit crunch hits Europe's banking sector as the = European=20 banking and insurance=20 giant Fortis is partly nationalised to ensure its = survival. It is seen as too big a European bank=20 to be allowed to go under.=20

Authorities in the Netherlands, Belgium and Luxembourg = agree to=20 pour in 11.2bn euros ($16.1bn; =A38.9bn). Fortis' share = price has=20 fallen sharply amid concerns about its debts.=20

In the US lawmakers announce they have reached a = bipartisan=20 agreement on a rescue plan for the American financial = system.=20

The package, to be approved by Congress, allows the = Treasury to=20 spend up to $700bn buying bad debts from ailing banks.=20

It will be the biggest intervention in the markets since = the=20 Great Depression of the 1930s.=20

29 September=20

In Britain the mortgage=20 lender Bradford & Bingley is nationalised.=20 The British government takes control of the bank's =A350bn = mortgages=20 and loans, while its savings operations and branches are = sold to=20 Spain's Santander.=20

The Icelandic government takes control of the country's=20 third-largest bank Glitnir after the company had faced = short-term=20 funding problems.=20

Wachovia, the fourth-largest US bank, is bought by its = larger=20 rival Citigroup in a rescue deal backed by the US = authorities. Under=20 the deal, Citigroup will absorb up to $42bn of Wachovia = losses.=20

The US House of Representatives rejects a $700bn rescue = plan for=20 the US financial system - sending shockwaves around the = world.=20

It opens up new uncertainties about how banks will deal = with=20 their exposure to toxic loans and how credit markets can = begin to=20 operate more normally. Wall Street shares plunge, with the = Dow Jones=20 index slumping 7% or 770 points, a record one-day point = fall.=20

30 September=20

Dexia becomes=20 the latest European bank to be bailed out as the=20 deepening credit crisis continues to shake the banking = sector.=20

After all-night talks the Belgian, French and Luxembourg=20 governments said they would put in 6.4bn euros ($9bn; = =A35bn) to keep=20 it afloat.=20

Separately, = the=20 Irish government says it will guarantee all deposits in the=20 country's main banks for two years.=20

In the UK, Prime Minister Gordon Brown says the = government is=20 planning to raise the limit on guaranteed bank deposits from = =A335,000=20 to =A350,000.=20

OCTOBER 2008: THE FIGHTBACK

1 October=20

Stock markets=20 stabilise ahead of a vote in the Senate, = which=20 eventually approves an amended $700bn financial rescue bill. =

Market confidence that Lloyds TSB's takeover of HBOS will = not be=20 derailed by stock market volatility sees HBOS shares rise = 20%.=20

A report says that French Finance Finister Christine = Lagarde=20 calls for an emergency EU bail-out fund for banks threatened = with=20 failure.=20

The EU says it is looking at whether Ireland's full = guarantee of=20 saving deposits is anti-competitive.=20

3 October=20

The US House of Representatives passes a=20 $700bn (=A3394bn) government plan to rescue the US financial = sector.=20

The 263-171 vote was the second in a week, following its = shock=20 rejection of an earlier version on Monday.=20

The UK's City watchdog, the Financial Services Authority = (FSA) raises the=20 limit of the amount of deposits that are guaranteed should a = bank go=20 bust to =A350,000.

6 October=20

Germany announces a 50bn euro=20 ($68bn; =A338.7bn) plan to save one of the country's biggest = banks=20

The deal to save Hypo Real Estate, reached with private = banks, is=20 worth 15bn euros more than the first rescue attempt, which = fell=20 apart a day earlier.=20

World stock markets react badly=20 to the ongoing turmoil.=20

The German=20 government says it will not pass new legislation to provide = extra=20 protection for savers.=20

Chancellor Angela Merkel had earlier said that no German = savers=20 would lose any money. But it emerges that this was a was a = political=20 pledge, rather than one which would see it change laws on = banking=20 deposits.=20

However Denmark had already responded by giving a 100% = guarantee=20 on savings, while Sweden increased its protection levels.=20

Iceland=20 announces part of a plan to hammer out a financial package = to shore=20 up its troubled banking sector. The = country's=20 largest banks agree to sell off some of their foreign assets = and=20 bring them home.=20

7 October=20

The Icelandic government takes control=20 of Landsbanki, the country's second = largest bank,=20 which owns Icesave in the UK.=20

8 October=20

UK government announces details of a rescue package for = the=20 banking system worth at least =A350bn ($88bn). BBC Business = Editor=20 Robert Peston says the deal amounts to a = semi-nationalisation. The=20 government is also offering up to =A3200bn ($350bn) in = short-term=20 lending support.=20

The US Federal Reserve, European Central Bank (ECB), Bank = of=20 England, and the central banks of Canada, Sweden and = Switzerland=20 make emergency interest rate cuts of half a percentage = point. The=20 Fed cut its base lending rate to 1.5%, the ECB to 3.75%, and = the=20 Bank of England to 4.5%.=20

10 October=20

Amid widespread fears of a global recession, Asian, = European and=20 US markets continue falling, despite central banks' rate = cuts and=20 cash injections.=20

11 October=20

Finance ministers from leading industrialised nations = pledge=20 action to tackle the financial crisis. The = G7=20 nations issue a five-point plan of "decisive action" to unfreeze credit markets, after a=20 meeting in Washington.=20

13 October=20

The UK government announces plans to pump billions of = pounds of=20 taxpayers' money into three UK banks in one = of the=20 UK's biggest nationalisations. Royal Bank = of=20 Scotland (RBS), Lloyds TSB and HBOS will have a total of = =A337bn=20 injected into them.=20

14 October=20

The US government unveils a = $250bn=20 (=A3143bn) plan to purchase stakes in a = wide=20 variety of banks in an effort to restore confidence in the = sector.=20 President George W Bush says the move will help to return = stability=20 to the US banking sector and ultimately help preserve free = markets.=20

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What = are=20 these?

GLOBAL=20 FINANCIAL CRISIS

KEY STORIES

Recession=20 fears unsettle stocks

EU = leaders seek=20 broad bank reform

US = unveils=20 $250bn banking rescue

Iceland=20 'working day and night'

UK = banks=20 receive =A337bn bail-out

Brown:=20 We'll be rock of stability

BACKGROUND AND ANALYSIS

World in=20 turmoil
A = look at=20 what is happening in markets most affected by the credit = crunch

Vote reveals=20 splits

Have=20 bail-outs worked?

CRISIS OVERVIEW

How = market=20 moves affect you

Q&A: US=20 $700bn bail-out plan

Timeline:=20 Global credit crunch

Credit=20 crunch jargon explained

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Who's gone,=20 the size of the bail-out and share price falls

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Should=20 taxpayers bail out banks?

Global=20 money gloom: Your stories

Iceland's=20 economy: Your stories

VIDEO REPORTS

Bush outlines=20 US banking rescue plan

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RBS = bail out:=20 'A sad thing for Scotland'

3D""

What went=20 wrong? Calls for reform

Key moments in the global financial = crisis

TOP = BUSINESS=20 STORIES

Recession=20 fears unsettle stocks

US = retail=20 sales decline sharply

EU = leaders seek=20 broad bank reform

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