Timeline: Global credit crunch

gazbom · 10-05-2008, 07:26 AM

Timeline: Global credit crunch

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

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

The problems, however, started much earlier.

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

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

Read more

10-05-2008, 07:26 AM	#1
gazbom Banned Join Date: Sep 2008 Location: Holland, 5 metres below sea level Posts: 191	Timeline: Global credit crunch Timeline: Global credit crunch A year ago, few people had heard of the term credit crunch, but the phrase has now entered dictionaries. Defined as "a severe shortage of money or credit", the start of the phenomenon has been pinpointed as 9 August 2007 when bad news from French bank BNP Paribas triggered sharp rise in the cost of credit, and made the financial world realise how serious the situation was. The problems, however, started much earlier. GROWING SUB-PRIME PROBLEMS After a two year period between 2004 and 2006 when US interest rates rose from 1% to 5.35%, the US housing market begins to suffer, with prices falling and a rise in homeowners defaulting on their mortgages. Default rates on sub-prime loans - high risk loans to clients with poor or no credit histories - rise to record levels. Read more