Crisis Timeline

7/27/2019 Crisis Timeline

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The Financial Crisis: A Timeline of Events and Policy ActionsFebruary 27, 2007 | Freddie Mac Press Release

The Federal Home Loan Mortgage Corporation (Freddie Mac) announces that it will no longer buythe most risky subprime mortgages and mortgage-related securities.

April 2, 2007 | SEC Filing

New Century Financial Corporation, a leading subprime mortgage lender, files for Chapter 11bankruptcy protection.

June 1, 2007 | Congressional Testimony

Standard and Poors and Moodys Investor Services downgrade over 100 bonds backed bysecond-lien subprime mortgages.

June 7, 2007

Bear Stearns informs investors that it is suspending redemptions from its High-Grade StructuredCredit Strategies Enhanced Leverage Fund.

June 28, 2007 | Federal Reserve Press Release

The Federal Open Market Committee (FOMC) votes to maintain its target for the federal funds rateat 5.25 percent.

July 11, 2007 | Standard and Poors Ratings Direct

Standard and Poors places 612 securities backed by subprime residential mortgages on a creditwatch.

July 24, 2007 | SEC Filing

Countrywide Financial Corporation warns of difficult conditions.

July 31, 2007 | U.S. Bankruptcy Filing

Bear Stearns liquidates two hedge funds that invested in various types of mortgage-backedsecurities.

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August 6, 2007 | SEC Filing

American Home Mortgage Investment Corporation files for Chapter 11 bankruptcy protection.

August 7, 2007 | Federal Reserve Press Release

The FOMC votes to maintain its target for the federal funds rate at 5.25 percent.

August 9, 2007 | BNP Paribas Press Release

BNP Paribas, Frances largest bank, halts redemptions on three investment funds.


The Federal Reserve Board announces that it will provide reserves as necessaryto promotetrading in the federal funds market at rates close to the FOMCs target rate of 5.25 percent. Incurrent circumstances, depository institutions may experience unusual funding needs because ofdislocations in money and credit markets. As always, the discount window is available as a source

of funding.

August 16, 2007 | SEC Filing

Fitch Ratings downgrades Countrywide Financial Corporation to BBB+, its third lowestinvestment-grade rating, and Countrywide borrows the entire $11.5 billion available in its creditlines with other banks.


The Federal Reserve Board votes to reduce the primary credit rate 50 basis points to 5.75 percent,bringing the rate to only 50 basis points above the FOMCs federal funds rate target. The Boardalso increases the maximum primary credit borrowing term to 30 days, renewable by the borrower.

September 14, 2007 | United Kingdom Treasury Department Press Release

The Chancellor of the Exchequer authorizes the Bank of England to provide liquidity support forNorthern Rock, the United Kingdoms fifth-largest mortgage lender.

September 18, 2007 | Federal Reserve Press Release

The FOMC votes to reduce its target for the federal funds rate 50 basis points to 4.75 percent. TheFederal Reserve Board votes to reduce the primary credit rate 50 basis points to 5.25 percent.

October 10, 2007 | Hope Now Press Release| Treasury Department Press Release

U.S. Treasury Secretary Paulson announces the HOPE NOW initiative, an alliance of investors,servicers, mortgage market participants, and credit and homeowners counselors encouraged bythe Treasury Department and the Department of Housing and Urban Development.

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October 15, 2007 | Bank of America Press Release

Citigroup, Bank of America, and JPMorgan Chase announce plans for an $80 billion MasterLiquidity Enhancement Conduit to purchase highly rated assets from existing special purposevehicles.

October 31, 2007 | Federal Reserve Press Release


November 1, 2007 |Additional Information

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

December 11, 2007 | Federal Reserve Press Release

The FOMC votes to reduce its target for the federal funds rate 25 basis points to 4.25 percent. The

Federal Reserve Board votes to reduce the primary credit rate 25 basis points to 4.75 percent.

December 12, 2007 | Federal Reserve Press Release|Additional Information

The Federal Reserve Board announces the creation of a Term Auction Facility (TAF) in which fixedamounts of term funds will be auctioned to depository institutions against a wide variety ofcollateral. The FOMC authorizes temporary reciprocal currency arrangements (swap lines) with theEuropean Central Bank (ECB) and the Swiss National Bank (SNB). The Fed states that it willprovide up to $20 billion and $4 billion to the ECB and SNB, respectively, for up to 6 months.


The Federal Reserve Board announces that TAF auctions will be conducted every two weeks aslong as financial market conditions warrant.

December 21, 2007 | Bank of America Press Release

Citigroup, JPMorgan Chase, and Bank of America abandon plans for the Master LiquidityEnhancement Conduit, announcing that the fund is not needed at this time.

January 11, 2008 | Bank of America Press Release

Bank of America announces that it will purchase Countrywide Financial in an all-stock transactionworth approximately $4 billion.

January 18, 2008 | SEC Filing

Fitch Ratings downgrades Ambac Financial Groups insurance financial strength rating to AA,Credit Watch Negative. Standard and Poors place Ambacs AAA rating on CreditWatch Negative.

January 22, 2008 | Federal Reserve Press Release

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In an intermeeting conference call, the FOMC votes to reduce its target for the federal funds rate75 basis points to 3.5 percent. The Federal Reserve Board votes to reduce the primary credit rate75 basis points to 4 percent.


The FOMC votes to reduce its target for the federal funds rate 50 basis points to 3 percent. The

Federal Reserve Board votes to reduce the primary credit rate 50 basis points to 3.5 percent.

February 13, 2008 | Public Law 110-185

President Bush signs the Economic Stimulus Act of 2008 (Public Law 110-185) into law.

February 17, 2008 | United Kingdom Treasury Department Press Release

Northern Rock is taken into state ownership by the Treasury of the United Kingdom.

March 5, 2008 | Carlyle Capital Corporation Press Release

Carlyle Capital Corporation receives a default notice after failing to meet margin calls on itsmortgage bond fund.

March 7, 2008 | Federal Reserve Press Release

The Federal Reserve Board announces $50 billion TAF auctions on March 10 and March 24 andextends the TAF for at least 6 months. The Board also initiates a series of term repurchasetransactions, expected to cumulate to $100 billion, conducted as 28-day term repurchaseagreements with primary dealers.

March 11, 2008 | Federal Reserve Press Release|Additional Information

The Federal Reserve Board announces the creation of the Term Securities Lending Facility(TSLF), which will lend up to $200 billion of Treasury securities for 28-day terms against federalagency debt, federal agency residential mortgage-backed securities (MBS), non-agency AAA/Aaaprivate label residential MBS, and other securities. The FOMC increases its swap lines with theECB by $10 billion and the Swiss National Bank by $2 billion and also extends these lines throughSeptember 30, 2008.


The Federal Reserve Board approves the financing arrangement announced by JPMorgan Chaseand Bear Stearns [see note for March 24]. The Federal Reserve Board also announces they aremonitoring market developments closely and will continue to provide liquidity as necessary topromote the orderly function of the financial system.

March 16, 2008 | Federal Reserve Press Release|Additional Information

The Federal Reserve Board establishes the Primary Dealer Credit Facility (PDCF), extending

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credit to primary dealers at the primary credit rate against a broad range of investment gradesecurities. The Federal Reserve Board votes to reduce the primary credit rate 25 basis points to3.25 percent, lowering the spread between the primary credit rate and FOMC target for the federalfunds rate to 25 basis points. The Board also votes to increase the maximum maturity of primarycredit loans to 90 days.



March 24, 2008 | Federal Reserve Bank of New York Press Release

The Federal Reserve Bank of New York announces that it will provide term financing to facilitateJPMorgan Chase & Co.s acquisition of The Bear Stearns Companies Inc. A limited liabilitycompany (Maiden Lane) is formed to control $30 billion of Bear Stearns assets that are pledged assecurity for $29 billion in term financing from the New York Fed at its primary credit rate. JPMorganChase will assume the first $1 billion of any losses on the portfolio.

April 30, 2008 | Federal Reserve Press Release

The FOMC votes to reduce its target for the federal funds rate 25 basis points to 2 percent. TheFederal Reserve Board votes to reduce the primary credit rate 25 basis points to 2.25 percent.

May 2, 2008 | Federal Reserve Press Release

The FOMC expands the list of eligible collateral for Schedule 2 TSLF auctions to includeAAA/Aaa-rated asset-backed securities, in addition to already eligible residential and commercialMBS and agency collateralized mortgage obligations. The FOMC also increases existing swap

lines with the ECB by $20 billion and with the Swiss National Bank by $6 billion. The FederalReserve Board expands TAF auctions from $50 billion to $75 billion.


The Federal Reserve Board announces approval of the notice of Bank of America to acquireCountrywide Financial Corporation.

June 5, 2008 | SEC Filing

Standard and Poors downgrades monoline bond insurers AMBAC and MBIA from AAA to AA.



July 11, 2008 | FDIC Press Release

The Office of Thrift Supervision closes IndyMac Bank, F.S.B. The Federal Deposit InsuranceCorporation (FDIC) announces the transfer of the insured deposits and most assets of IndyMac

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Bank, F.S.B. to IndyMac Federal Bank, FSB.

July 13, 2008 | Federal Reserve Press Release

The Federal Reserve Board authorizes the Federal Reserve Bank of New York to lend to theFederal National Mortgage Association (Fannie Mae) and the Federal Home Loan MortgageCorporation (Freddie Mac), should such lending prove necessary.

July 13, 2008 | Treasury Department Press Release

The U.S. Treasury Department announces a temporary increase in the credit lines of Fannie Maeand Freddie Mac and a temporary authorization for the Treasury to purchase equity in either GSE ifneeded.

July 15, 2008 | SEC Press Release

The Securities Exchange Commission (SEC) issues an emergency order temporarily prohibitingnaked short selling in the securities of Fannie Mae, Freddie Mac, and primary dealers at

commercial and investment banks.

July 30, 2008 | Public Law 110-289

President Bush signs into law the Housing and Economic Recovery Act of 2008 (Public Law110-289), which, among other provisions, authorizes the Treasury to purchase GSE obligationsand reforms the regulatory supervision of the GSEs under a new Federal Housing Finance

Agency.

July 30, 2008 | Federal Reserve Press Release

The Federal Reserve Board extends the TSLF and PDCF through January 30, 2009, introducesauctions of options on $50 billion of draws on the TSLF, and introduces 84-day TAF loans. TheFOMC increases its swap line with the ECB to $55 billion.




Following an intermeeting conference call, the FOMC releases a statement about the currentfinancial market turmoil, and notes that the downside risks to growth have increased appreciably.

September 7, 2008 | Treasury Department Press Release

The Federal Housing Finance Agency (FHFA) places Fannie Mae and Freddie Mac in governmentconservatorship. The U.S. Treasury Department announces three additional measures tocomplement the FHFAs decision: 1) Preferred stock purchase agreements between theTreasury/FHFA and Fannie Mae and Freddie Mac to ensure the GSEs positive net worth; 2) a newsecured lending facility which will be available to Fannie Mae, Freddie Mac, and the Federal Home

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Loan Banks; and 3) a temporary program to purchase GSE MBS.


The Federal Reserve Board expands the list of eligible collateral for the PDCF to include anycollateral that can be pledged in the tri-party repo system of the two major clearing banks.Previously PDCF collateral had been limited to investment-grade debt securities. The Board alsoexpands the list of collateral accepted by TSLF to include all investment-grade debt securities and

increases the frequency of Schedule 2 TSLF auctions and total offering to $150 billion. The Boardalso adopts an interim final rule that provides temporary exceptions to Section 23A of the FederalReserve Act to allow insured depository institutions to provide liquidity to their affiliates for assetstypically funded in the tri-party repo market.

September 15, 2008 | Bank of America Press Release

Bank of America announces its intent to purchase Merrill Lynch & Co. for $50 billion.

September 15, 2008 | SEC Filing

Lehman Brothers Holdings Incorporated files for Chapter 11 bankruptcy protection.


The Federal Reserve Board authorizes the Federal Reserve Bank of New York to lend up to $85billion to the American International Group (AIG) under Section 13(3) of the Federal Reserve Act.



September 16, 2008 | Reserve Funds Press Release

The net asset value of shares in the Reserve Primary Money Fund falls below $1, primarily due tolosses on Lehman Brothers commercial paper and medium-term notes.


The U.S. Treasury Department announces a Supplementary Financing Program consisting of aseries of Treasury bill issues that will provide cash for use in Federal Reserve initiatives.

September 17, 2008 | SEC Press Release

The SEC announces a temporary emergency ban on short selling in the stocks of all companies inthe financial sector.


The FOMC expands existing swap lines by $180 billion and authorizes new swap lines with theBank of Japan, Bank of England, and Bank of Canada.

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The Federal Reserve Board announces the creation of the Asset-Backed Commercial PaperMoney Market Mutual Fund Liquidity Facility (AMLF) to extend non-recourse loans at the primarycredit rate to U.S. depository institutions and bank holding companies to finance their purchase ofhigh-quality asset-backed commercial paper from money market mutual funds. The FederalReserve Board also announces plans to purchase federal agency discount notes (short-term debt

obligations issued by Fannie Mae, Freddie Mac, and Federal Home Loan Banks) from primarydealers.


The U.S. Treasury Department announces a temporary guaranty program that will make availableup to $50 billion from the Exchange Stabilization Fund to guarantee investments in participatingmoney market mutual funds.

September 20, 2008 | Treasury Department Press Release| Draft Legislation

The U.S. Treasury Department submits draft legislation to Congress for authority to purchasetroubled assets.


The Federal Reserve Board approves applications of investment banking companies GoldmanSachs and Morgan Stanley to become bank holding companies.


The FOMC establishes new swap lines with the Reserve Bank of Australia and the SverigesRiksbank for up to $10 billion each and with the Danmarks Nationalbank and the Norges Bank forup to $5 billion each. The swap lines are authorized through January 30, 2009.

September 25, 2008 | Office of Thrift Supervision Press Release

The Office of Thrift Supervision closes Washington Mutual Bank. JPMorgan Chase acquires thebanking operations of Washington Mutual in a transaction facilitated by the FDIC.


The FOMC increases existing swap lines with the ECB by $10 billion and the Swiss National Bankby $3 billion.


The FOMC authorizes a $330 billion expansion of swap lines with Bank of Canada, Bank ofEngland, Bank of Japan, Danmarks Nationalbank, ECB, Norges Bank, Reserve Bank of Australia,Sveriges Riksbank, and Swiss National Bank Swap lines outstanding now total $620 billion. TheFederal Reserve Board expands the TAF, announcing an increase in the size of the 84-day

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maturity auction to $75 billion and two forward TAF auctions totaling $150 billion to provideshort-term (one- to two-week) TAF credit over year-end.


The U.S. Treasury Department opens its Temporary Guarantee Program for Money Market Funds[see note for September 19]. The temporary guarantee program provides coverage toshareholders for amounts that they held in participating money market funds as of the close of

business on September 19, 2008.

September 29, 2008 | FDIC Press Release

The FDIC announces that Citigroup will purchase the banking operations of Wachovia Corporation.The FDIC agrees to enter into a loss-sharing arrangement with Citigroup on a $312 billion pool ofloans, with Citigroup absorbing the first $42 billion of losses and the FDIC absorbing losses beyondthat. In return, Citigroup would grant the FDIC $12 billion in preferred stock and warrants.


The U.S. House of Representatives rejects legislation submitted by the Treasury Departmentrequesting authority to purchase troubled assets from financial institutions [see note for September20].


Wells Fargo announces a competing proposal to purchase Wachovia Corporation that does notrequire assistance from the FDIC.

October 3, 2008 | H.R. 1424| Public Law 110-343

Congress passes and President Bush signs into law the Emergency Economic Stabilization Act of2008 (Public Law 110-343), which establishes the $700 billion Troubled Asset Relief Program(TARP).


The Federal Reserve Board announce that the Fed will pay interest on depository institutionsrequired and excess reserve balances at an average of the federal funds target rate less 10 basispoints on required reserves and less 75 basis points on excess reserves.


The Federal Reserve Board announces the creation of the Commercial Paper Funding Facility(CPFF), which will provide a liquidity backstop to U.S. issuers of commercial paper through aspecial purpose vehicle that will purchase three-month unsecured and asset-backed commercialpaper directly from eligible issuers.

October 7, 2008 | FDIC Press Release

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The FDIC announces an increase in deposit insurance coverage to $250,000 per depositor asauthorized by the Emergency Economic Stabilization Act of 2008.


The Federal Reserve Board authorizes the Federal Reserve Bank of New York to borrow up to$37.8 billion in investment-grade, fixed-income securities from American International Group (AIG)in return for cash collateral.




The Federal Reserve Board announces its approval of an application by Wells Fargo & Co. toacquire Wachovia Corporation.


The FOMC increases existing swap lines with foreign central banks. The Bank of England,European Central Bank, and Swiss National Bank announce that they will conduct tenders of U.S.dollar funding at 7-, 28-, and 84-day maturities at fixed interest rates.


The Federal Reserve announces additional details of the Commercial Paper Funding Facility(CPFF).


The FOMC increases its swap line with the Bank of Japan.

October 14, 2008 | Treasury Department TARP Press Release|Additional Information

U.S. Treasury Department announces the Troubled Asset Relief Program (TARP) that willpurchase capital in financial institutions under the authority of the Emergency EconomicStabilization Act of 2008. The U.S. Treasury will make available $250 billion of capital to U.S.

financial institutions. This facility will allow banking organizations to apply for a preferred stockinvestment by the U.S. Treasury. Nine large financial organizations announce their intention tosubscribe to the facility in an aggregate amount of $125 billion.

October 14, 2008 | FDIC TLGP Press Release

The FDIC creates a new Temporary Liquidity Guarantee Program to guarantee the senior debt ofall FDIC-insured institutions and their holding companies, as well as deposits innon-interest-bearing deposit transaction through June 30, 2009.

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The Federal Reserve Board announces creation of the Money Market Investor Funding Facility(MMIFF). Under the facility, the Federal Reserve Bank of New York provides senior securedfunding to a series of special purpose vehicles to facilitate the purchase of assets from eligibleinvestors, such as U.S. money market mutual funds. Among the assets the facility will purchaseare U.S. dollar-denominated certificates of deposit and commercial paper issued by highly ratedfinancial institutions with a maturity of 90 days or less.


The Federal Reserve Board announces that it will alter the formula used to determine the interestrate paid to depository institutions on excess reserve balances. The new rate will be set equal tothe lowest FOMC target rate in effect during the reserve maintenance period less 35 basis points.

October 24, 2008 | PNC Press Release

PNC Financial Services Group Inc. purchases National City Corporation, creating the fifth largestU.S. bank.

October 28, 2008 | Treasury Department CPP Transaction Report

The U.S. Treasury Department purchases a total of $125 billion in preferred stock in nine U.S.banks under the Capital Purchase Program.


The FOMC and Reserve Bank of New Zealand establish a $15 billion swap line.


The FOMC votes to reduce its target for the federal funds rate 50 basis points to 1.00 percent. TheFederal Reserve Board reduces the primary credit rate 50 basis points to 1.25 percent.


The FOMC also establishes swap lines with the Banco Central do Brasil, Banco de Mexico, Bankof Korea, and the Monetary Authority of Singapore for up to $30 billion each.

October 29, 2008 | IMF Press Release

The International Monetary Fund (IMF) announces the creation of a short-term liquidity facility formarket-access countries.

November 5, 2008 | Federal Reserve Press Release

The Federal Reserve Board announces that it will alter the formula used to determine the interestrate paid to depository institutions on required and excess reserve balances. The rate on requiredreserves will be set equal to the average target federal funds rate over the reserve maintenance

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period. The rate on excess balances will be set equal to the lowest FOMC target rate in effectduring the reserve maintenance period.


The Federal Reserve Board approves the applications of American Express and AmericanExpress Travel Related Services to become bank holding companies.

November 10, 2008 | Federal Reserve Press Release| Treasury Department Press Release

The Federal Reserve Board and the U.S. Treasury Department announce a restructuring of thegovernments financial support of AIG. The Treasury will purchase $40 billion of AIG preferredshares under the TARP program, a portion of which will be used to reduce the Federal Reservesloan to AIG from $85 billion to $60 billion. The terms of the loan are modified to reduce the interestrate to the three-month LIBOR plus 300 basis points and lengthen the term of the loan from two tofive years. The Federal Reserve Board also authorizes the Federal Reserve Bank of New York toestablish two new lending facilities for AIG: The Residential Mortgage- Backed Securities Facilitywill lend up to $22.5 billion to a newly formed limited liability company (LLC) to purchase residentialMBS from AIG; the Collateralized Debt Obligations Facility will lend up to $30 billion to a newly

formed LLC to purchase CDOs from AIG (Maiden Lane III LLC).

November 11, 2008 | Treasury Department Press Release

The U.S. Treasury Department announces a new streamlined loan modification program withcooperation from the Federal Housing Finance Agency (FHFA), Department of Housing and UrbanDevelopment, and the HOPE NOW alliance.


U.S. Treasury Secretary Paulson formally announces that the Treasury has decided not to useTARP funds to purchase illiquid mortgage-related assets from financial institutions.

November 14, 2008 | Treasury Department CPP Transaction Report

The U.S. Treasury Department purchases a total of $33.5 billion in preferred stock in 21 U.S.banks under the Capital Purchase Program.

November 17, 2008 | Lincoln National Press Release| Hartford Press Release| Genworth PressRelease

Three large U.S. life insurance companies seek TARP funding: Lincoln National, Hartford FinancialServices Group, and Genworth Financial announce their intentions to purchaselenders/depositories and thus qualify as savings and loan companies to access TARP funding.

November 18, 2008 | Senate Hearing

Executives of Ford, General Motors, and Chrysler testify before Congress, requesting access to theTARP for federal loans.

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November 20, 2008 | Fannie Mae Press Release| Freddie Mac Press Release

Fannie Mae and Freddie Mac announce that they will suspend mortgage foreclosures until January2009.


The U.S. Treasury Department announces that it will help liquidate The Reserve Funds U.S.

Government Fund. The Treasury agrees to serve as a buyer of last resort for the funds securitiesto ensure the orderly liquidation of the fund.

November 21, 2008 | Treasury Department CPP Transaction Report

The U.S. Treasury Department purchases a total of $3 billion in preferred stock in 23 U.S. banksunder the Capital Purchase Program.

November 23, 2008 | Federal Reserve Press Release| Summary of Terms

The U.S. Treasury Department, Federal Reserve Board, and FDIC jointly announce an agreementwith Citigroup to provide a package of guarantees, liquidity access, and capital. Citigroup will issuepreferred shares to the Treasury and FDIC in exchange for protection against losses on a $306billion pool of commercial and residential securities held by Citigroup. The Federal Reserve willbackstop residual risk in the asset pool through a non-recourse loan. In addition, the Treasury willinvest an additional $20 billion in Citigroup from the TARP.


The Federal Reserve Board announces the creation of the Term Asset-Backed Securities LendingFacility (TALF), under which the Federal Reserve Bank of New York will lend up to $200 billion on

a non-recourse basis to holders of AAA-rated asset-backed securities and recently originatedconsumer and small business loans. The U.S. Treasury will provide $20 billion of TARP money forcredit protection.


The Federal Reserve Board announces a new program to purchase direct obligations of housingrelated government-sponsored enterprises (GSEs)Fannie Mae, Freddie Mac and Federal HomeLoan Banksand MBS backed by the GSEs. Purchases of up to $100 billion in GSE directobligations will be conducted as auctions among Federal Reserve primary dealers. Purchases ofup to $500 billion in MBS will be conducted by asset managers.


The Federal Reserve Board announces approval of the notice of Bank of America Corporation toacquire Merrill Lynch and Company.


The Federal Reserve Board announces that it will extend three liquidity facilities, the PrimaryDealer Credit Facility (PDCF), the Asset-Backed Commercial Paper Money Market Fund Liquidity

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Facility (AMLF), and the Term Securities Lending Facility (TSLF) through April 30, 2009.

December 3, 2008 | SEC Press Release

The SEC approves measures to increase transparency and accountability at credit rating agenciesand thereby ensure that firms provide more meaningful ratings and greater disclosure to investors.

December 5, 2008 | Treasury Department CPP Transaction Report

The U.S. Treasury Department purchases a total of $4 billion in preferred stock in 35 U.S. banksunder the Capital Purchase Program.

December 10, 2008 | FDIC Press Release

The FDIC reiterates the guarantee of federal deposit insurance in the event of a bank failure.

December 11, 2008 | NBER Press Release

The Business Cycle Dating Committee of the National Bureau of Economic Research announcesthat a peak in U.S. economic activity occurred in December 2007 and that the economy has sincebeen in a recession.




The Federal Reserve Board announces that it has approved the application of PNC FinancialServices to acquire National City Corporation.


The FOMC votes to establish a target range for the effective federal funds rate of 0 to 0.25percent. The Federal Reserve Board votes to reduce the primary credit rate 75 basis points to 0.50percent. The Federal Reserve Board also establishes the interest rates on required reservebalances and excess balances at 0.25 percent for reserve maintenance periods beginningDecember 18, 2008.

December 19, 2008 | Treasury Department Press Release| General Motors Term Sheet| ChryslerTerm Sheet

The U.S. Treasury Department authorizes loans of up to $13.4 billion for General Motors and $4.0billion for Chrysler from the TARP.


The Federal Reserve Board announces revised terms and conditions of the Term Asset-Backed

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Securities Loan Facility (TALF). Among the revisions are an extension of TALF loans frommaturities of one year to three years and an expansion of eligible ABS collateral.




The Federal Reserve Board approves the application of CIT Group Inc., an $81 billion financingcompany, to become a bank holding company. The Board cites unusual and exigentcircumstances affecting the financial markets for expeditious action on CIT Groups application.


The U.S. Treasury Department purchases a total of $15.1 billion in preferred stock from 43 U.S.banks under the Capital Purchase Program.


The Federal Reserve Board approves the applications of GMAC LLC and IB Finance HoldingCompany, LLC (IBFHC) to become bank holding companies, on conversion of GMAC Bank, a $33billion Utah industrial loan company, to a commercial bank. GMAC Bank is a direct subsidiary ofIBFHC and an indirect subsidiary of GMAC LLC, a $211 billion company. The Board cites unusualand exigent circumstances affecting the financial markets for expeditious action on theseapplications. As part of the agreement, General Motors will reduce its ownership interest in GMACto less than 10 percent.

December 29, 2008 | Treasury Department Press Release

The U.S. Treasury Department announces that it will purchase $5 billion in equity from GMAC aspart of its program to assist the domestic automotive industry. The Treasury also agrees to lend upto $1 billion to General Motors "so that GM can participate in a rights offering at GMAC in supportof GMAC's reorganization as a bank holding company." This commitment is in addition to thesupport announced on December 19, 2008.


The Federal Reserve Board announces that it expects to begin to purchase mortgage-backedsecurities backed by Fannie Mae, Freddie Mac and Ginnie Mae under a previously announcedprogram in early January 2009 (see November 25, 2008).

December 30, 2008 | SEC Press Release

The U.S. Securities and Exchange Commission (SEC) releases a report that recommends againstthe suspension of fair value accounting standards. The report was mandated by the EmergencyEconomic Stabilization Act of 2008 (EESA).

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The U.S. Treasury Department purchases a total of $1.91 billion in preferred stock from seven U.S.banks under the Capital Purchase Program.

January 5, 2009 | Federal Reserve Bank of New York Press Release

The Federal Reserve Bank of New York begins purchasing fixed-rate mortgage-backed securities

guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae under a program first announced onNovember 25, 2008.


The Federal Reserve Board announces two changes to the Money Market Investor FundingFacility (MMIFF) that 1) expand the set of institutions eligible to participate in the MMIFF and 2)reduce the minimum yield on assets eligible to be sold to the MMIFF.

January 8, 2009 | Moodys Special Comment on FHLB

Moodys Investor Services issues a report suggesting that the Federal Home Loan Banks arecurrently facing the potential for significant accounting write-downs on their $76.2 billionprivate-label MBS securities portfolio. According to Moodys, only four of 12 Banks capital ratioswould remain above regulatory minimums under a worst-case scenario.

January 9, 2009 | Congressional Oversight Panel Press Release

The Congressional Oversight Panel issues its second monthly report on the expenditure of theTroubled Asset Relief Program (TARP).

January 9, 2009 | Treasury Department CPP Transaction Report


January 12, 2009 | FDIC Press Release

The FDIC issues a letter to FDIC-supervised institutions calling on them to implement a process tomonitor their use of capital injections, liquidity support and/or financing guarantees obtainedthrough Treasury, FDIC, and Federal Reserve financial stability programs.

January 12, 2009 | White House Press Release| More Information

At the request of President-Elect Obama, President Bush submits a request to Congress for theremaining $350 billion in TARP funding for use by the incoming administration.

January 13, 2009 | Federal Home Loan Bank of Seattle Press Release

The Federal Home Loan Bank of Seattle reports that it will likely report a risk-based capitaldeficiency and suspend its dividend because of a decline in the market value of its

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mortgage-backed securities portfolio. The move follows a similar announcement on January 8 bythe Federal Home Loan Bank of San Francisco.



January 16, 2009 | Federal Reserve Press Release| Term Sheet

The U.S. Treasury Department, Federal Reserve, and FDIC announce a package of guarantees,liquidity access, and capital for Bank of America. The U.S. Treasury and the FDIC will enter aloss-sharing arrangement with Bank of America on a $118 billion portfolio of loans, securities, andother assets in exchange for preferred shares. In addition, and if necessary, the Federal Reservewill provide a non-recourse loan to back-stop residual risk in the portfolio. Separately, the U.S.Treasury will invest $20 billion in Bank of America from the TARP in exchange for preferred stock.

January 16, 2009 | Treasury Department Press Release

The U.S. Treasury Department, Federal Reserve and FDIC finalize terms of their guaranteeagreement with Citigroup. (See announcement on November 23, 2008.)

January 16, 2009 | Treasury Department Press Release

The U.S. Treasury Department announces that it will lend $1.5 billion from the TARP to a specialpurpose entity created by Chrysler Financial to finance the extension of new consumer auto loans.


The U.S. Treasury Department purchases a total of $326 million in preferred stock from 23 U.S.banks under the Capital Purchase Program.

January 28, 2009 | NCUA Press Release

The National Credit Union Administration (NCUA) Board announces that the NCUA will guaranteeuninsured shares at all corporate credit unions through February 2009 and establish a voluntaryguarantee program for uninsured shares of credit unions through December 2010. The Board alsoapproves a $1 billion capital purchase in U.S. Central Corporate Federal Credit Union. Corporatecredit unions provide financing, check clearing, and other services to retail credit unions.


The Board of Governors announces a policy to avoid preventable foreclosures on certainresidential mortgage assets held, controlled or owned by a Federal Reserve Bank. The policy wasdeveloped pursuant to section 110 of the Emergency Economic Stabilization Act.


The U.S. Treasury Department purchases a total of $1.15 billion in preferred stock from 42 U.S.

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banks under the Capital Purchase Program.

February 3, 2009 | Federal Reserve Press Release

The Federal Reserve announces the extension, through October 30, 2009, of the existing liquidityprograms scheduled to expire on April 30, 2009. The Board of Governors and the FOMC note"continuing substantial strains in many financial markets." In addition, the swap lines between theFederal Reserve and other central banks are also extended to October 30, 2009. The expiration

date for the TALF remains December 31, 2009, and the TAF does not have an expiration date.


The Federal Reserve Board releases additional terms and conditions of the Term Asset-BackedSecurities Loan Facility (TALF). Under the TALF, the Federal Reserve Bank of New York will lendup to $200 billion to eligible owners of certain AAA-rated asset-backed securities backed by newlyand recently originated auto loans, credit card loans, student loans and SBA-guaranteed smallbusiness loans.

February 6, 2009 | Treasury Department CPP Transaction Report

The U.S. Treasury Department purchases a total of $238.5 million in preferred stock from 28 U.S.banks under the Capital Purchase Program.

February 6, 2009 | Special Inspector General TARP

The Office of the Special Inspector General for the Troubled Asset Relief Program issues itsquarterly report to Congress on the operation of the Troubled Asset Relief Program.

February 10, 2009 | Treasury Department Press Release| Fact Sheet

U.S. Treasury Secretary Timothy Geithner announces a Financial Stability Plan involving Treasurypurchases of convertible preferred stock in eligible banks, the creation of a Public-PrivateInvestment Fund to acquire troubled loans and other assets from financial institutions, expansion ofthe Federal Reserves Term Asset-Backed Securities Loan Facility (TALF), and new initiatives tostem residential mortgage foreclosures and to support small business lending.


The Federal Reserve Board announces that is prepared to expand the Term Asset-BackedSecurities Loan Facility (TALF) to as much as $1 trillion and broaden the eligible collateral toinclude AAA-rated commercial mortgage-backed securities, private-label residentialmortgage-backed securities, and other asset-backed securities. An expansion of the TALF wouldbe supported by $100 billion from the Troubled Asset Relief Program (TARP). The FederalReserve Board will announce the date that the TALF will commence operations later this month.



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February 17, 2009 | Treasury Department Press Release

The U.S. Treasury Department releases its first monthly survey of bank lending by the top 20recipients of government investment through the Capital Purchase Program. The survey foundthat banks continued to originate, refinance and renew loans from the beginning of the program inOctober through December 2008.

February 17, 2009 |American Recovery and Reinvestment Act of 2009

President Obama signs into law the "American Recovery and Reinvestment Act of 2009", whichincludes a variety of spending measures and tax cuts intended to promote economic recovery.

February 18, 2009 | Executive Summary

President Obama announces The Homeowner Affordability and Stability Plan. The plan includesa program to permit the refinancing of conforming home mortgages owned or guaranteed byFannie Mae or Freddie Mac that currently exceed 80 percent of the value of the underlying home.The plan also creates a $75 billion Homeowner Stability Initiative to modify the terms of eligible

home loans to reduce monthly loan payments. In addition, the U.S. Treasury Department willincrease its preferred stock purchase agreements with Fannie Mae and Freddie Mac to $200billion, and increase the limits on the size of Fannie Mae and Freddie Mac's portfolios to $900billion.


The U.S. Treasury Department, Federal Deposit Insurance Corporation, Office of the Comptrollerof the Currency, Office of Thrift Supervision, and the Federal Reserve Board issue a joint statementthat the U.S. government stands firmly behind the banking system, and that the government willensure that banks have the capital and liquidity they need to provide the credit necessary to restore

economic growth. Further, the agencies reiterate their determination to preserve the stability ofsystemically important financial institutions.




The Federal Reserve Board, Federal Deposit Insurance Corporation, Office of the Comptroller ofthe Currency and Office of Thrift Supervision announce that they will conduct forward-lookingeconomic assessments or "stress tests" of eligible U.S. bank holding companies with assetsexceeding $100 billion. Supervisors will work with the firms to estimate the range of possible futurelosses and the resources to absorb such losses over a two-year period.The assessment process isexpected to be completed by the end of April 2009.

February 26, 2009 | FDIC Quarterly Banking Profile

The FDIC announces that the number of "problem banks" increased from 171 institutions with $116billion of assets at the end of the third quarter of 2008, to 252 insured institutions with $159 billion

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in assets at the end of fourth quarter of 2008. The FDIC also announces that there were 25 bankfailures and five assistance transactions in 2008, which was the largest annual number since 1993.

February 26, 2009 | Fannie Mae Press Release

Fannie Mae reports a loss of $25.2 billion in the fourth quarter of 2008, and a full year 2008 loss of$58.7 billion. Fannie Mae also reports that on February 25, 2009, the Federal Housing Finance

Agency submitted a request for $15.2 billion from the U.S. Treasury Department under the terms ofthe Senior Preferred Stock Purchase Agreement in order to eliminate Fannie Mae's net worthdeficit as of December 31, 2008.

February 27, 2009 | Treasury Department Press Release

The U.S. Treasury Department announces its willingness to convert up to $25 billion of Citigrouppreferred stock issued under the Capital Purchase Program into common equity. The conversion iscontingent on the willingness of private investors to convert a similar amount of preferred sharesinto common equity. Remaining U.S. Treasury and FDIC preferred shares issued under theTargeted Investment Program and Asset Guarantee Program would be converted into a trust

preferred security of greater structural seniority that would carry the same 8% cash dividend rateas the existing issue.

February 27, 2009 | FDIC Press Release

The Federal Deposit Insurance Corporation (FDIC) announces changes in its risk-basedassessment system and a 20 basis point emergency special assessment on insured depositoryinstitutions to be collected on September 30, 2009.



March 2, 2009 |AIG Press Release| Federal Reserve Press Release| Treasury DepartmentPress Release

The U.S. Treasury Department and Federal Reserve Board announce a restructuring of thegovernment's assistance to American International Group (AIG). Under the restructuring, AIG willreceive as much as $30 billion of additional capital from the Troubled Asset Relief Program(TARP). In addition, the U.S. Treasury Department will exchange its existing $40 billion cumulative

preferred shares in AIG for new preferred shares with revised terms that more closely resemblecommon equity. Finally, AIG's revolving credit facility with the Federal Reserve Bank of New Yorkwill be reduced from $60 billion to no less than $25 billion and the terms will be modified. Inexchange, the Federal Reserve will receive preferred interests in two special purpose vehiclescreated to hold the outstanding common stock of two subsidiaries of AIG: American Life InsuranceCompany and American International Assurance Company Ltd. Separately, AIG reports a fourthquarter 2008 loss of $61.7 billion, and a loss of $99.3 billion for all of 2008.


The U.S. Treasury Department and the Federal Reserve Board announce the launch of the Term

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Asset-Backed Securities Loan Facility (TALF). Under the program, the Federal Reserve Bank ofNew York will lend up to $200 billion to eligible owners of certain AAA-rated asset-backedsecurities backed by newly and recently originated auto loans, credit card loans, student loans andsmall business loans that are guaranteed by the Small Business Administration. The FederalReserve and Treasury expect to include asset-backed securities backed by other types of loans infuture monthly fundings. Subscriptions for funding in March will be accepted on March 17, 2009.Securitizations will be funded by the program on March 25, 2009. The program will hold monthlyfundings through December 2009 or longer if extended by the Federal Reserve Board.

March 4, 2009 | Treasury Department Press Release

The U.S. Treasury Department announces guidelines to enable servicers to begin modifications ofeligible mortgages under the Homeowner Affordability and Stability Plan.

March 6, 2009 | Treasury Department CPP Transaction Report



The Federal Reserve Board releases the minutes of its meetings from July 13, 2008 throughDecember 16, 2008 concerning Federal Reserve liquidity facilities and other issues related to thefinancial turmoil.

March 11, 2009 | Freddie Mac Press Release

Freddie Mac announces that it had a net loss of $23.9 billion in the fourth quarter of 2008, and anet loss of $50.1 billion for 2008 as a whole. Further, Freddie Mac announces that its conservator

has submitted a request to the U.S. Treasury Department for an additional $30.8 billion in fundingfor the company under the Senior Preferred Stock Purchase Agreement with the Treasury.



March 17, 2009 | FDIC Press Release

The Federal Deposit Insurance Corporation (FDIC) decides to extend the debt guarantee portion ofthe Temporary Liquidity Guarantee Program (TLGP) from June 30, 2009 through October 31,2009, and to impose a surcharge on debt issued with a maturity of one-year or more beginning inthe second quarter of 2009 to gradually phase-out the program.


The FOMC votes to maintain the target range for the effective federal funds at 0 to 0.25 percent. Inaddition, the FOMC decides to increase the size of the Federal Reserve's balance sheet bypurchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its totalpurchases of these securities to up to $1.25 trillion this year, and to increase its purchases of

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agency debt this year by up to $100 billion to a total of up to $200 billion. The FOMC also decidesto purchase up to $300 billion of longer-term Treasury securities over the next six months to helpimprove conditions in private credit markets. Finally, the FOMC announces that it anticipatesexpanding the range of eligible collateral for the TALF (Term Asset-Backed Securities LoanFacility).


The Federal Reserve Bank of New York releases more information on the Federal Reserve's planto purchase Treasury securities. The Desk will concentrate its purchases in nominal maturitiesranging from 2 to 10 years. The purchases will be conducted with the Federal Reserve's primarydealers through a series of competitive auctions and will occur two to three times a week. TheDesk plans to hold the first purchase operation late next week.


The U.S. Department of the Treasury announces an Auto Supplier Support Program that willprovide up to $5 billion in financing to the automotive industry. The Supplier Support Program willprovide selected suppliers with financial protection on monies ("receivables") they are owed by

domestic auto companies and the opportunity to access immediate liquidity against thoseobligations. Receivables created with respect to goods shipped after March 19, 2009, will beeligible for the program. Any domestic auto company is eligible to participate in the program. AnyU.S.-based supplier that ships to a participating auto manufacturer on qualifying commercial termsmay be eligible to participate in the program.


The Federal Reserve Board announces an expansion of the eligible collateral for loans extendedby the Term Asset-Backed Securities Loan Facility (TALF) to include asset-backed securitiesbacked by mortgage servicing advances, loans or leases related to business equipment, leases of

vehicle fleets, and floorplan loans. The new categories of collateral will be eligible for the AprilTALF funding.


The Federal Reserve Bank of New York releases the initial results of the first round of loanrequests for funding from the Term Asset-Backed Securities Loan Facility (TALF). The amount ofTALF loans requested at the March 17-19 operation was $4.7 billion.

March 19, 2009 | FDIC Press Release

The FDIC completes the sale of IndyMac Federal Bank to OneWest Bank. OneWest will assume alldeposits of IndyMac, and the 33 branches of IndyMac will reopen as branches of OneWest onMarch 20. As of January 31, 2009, IndyMac had total assests of $23.5 billion and total deposits of$6.4 billion. IndyMac reported fourth quarter 2008 losses of $2.6 billion, and the total estimatedloss to the Deposit Insurance Fund of the FDIC is $10.7 billion. The FDIC had been namedconservator of IndyMac FSB on July 11, 2008.


The U.S. Treasury Department purchases a total of $80.8 million in preferred stock from 10 U.S.

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banks under the Capital Purchase Program.


The Federal Reserve and the U.S. Treasury issue a joint statement on the appropriate roles ofeach during the current financial crisis and into the future, and on the steps necessary to ensurefinancial and monetary stability. The four points of agreement are 1) The Treasury and the FederalReserve will continue to cooperate in improving the functioning of credit markets and fostering

financial stability; 2) The Federal Reserve should avoid credit risk and credit allocation, which arethe province of fiscal authorities; 3) The need to preserve monetary stability, and that actions bythe Federal Reserve in the pursuit of financial stability must not constrain the exercise of monetarypolicy as needed to foster maximum sustainable employment and price stability; and 4) The needfor a comprehensive resolution regime for systemically critical financial institutions. In addition, theTreasury will seek to remove the Maiden Lane facilities from the Federal Reserve's balance sheet.


The U.S. Treasury Department announces details on the Public-Private Investment Program for

Legacy Assets. The program will have two parts: a Legacy Loans Program and a LegacySecurities Program. The Legacy Loans Program will facilitate the creation of individualPublic-Private Investment Funds which will purchase distressed loans that are currently held bybanks. The U.S. Treasury intends to provide 50 percent of the equity capital for each fund. TheFDIC will provide oversight for the formation, funding, and operation of these funds, and guaranteethe debt issued by the funds. Under the Legacy Securities Program, the U.S. Treasury Departmentwill approve up to five asset managers who will have the opportunity to raise private capital toacquire distressed securities currently held by banks. The U.S. Treasury will provide 50 percent ofthe equity capital for each investment fund and will consider requests for loans to each fund. Inaddition, the investment funds would also be eligible for non-recourse loans from the Term

Asset-Backed Securities Facility (TALF).

March 25, 2009 | Treasury Department Press Release| Draft Legislation

The U.S. Treasury Department proposes legislation that would grant the U.S. governmentauthority to put certain financial institutions into conservatorship or receivership to avert systemicrisks posed by the potential insolvency of a significant financial firm. The authority is modeled onthe resolution authority that the FDIC has with respect to banks and that the Federal HousingFinance Agency has with regard to the GSEs. The authority would apply to non-bank financialinstitutions that have the potential to pose systemic risks to the economy but that are not currentlysubject to the resolution authority of the FDIC or the Federal Housing Finance Agency.


The U.S. Treasury Department outlines a framework for comprehensive regulatory reform thatfocuses on containing systemic risks in the financial system. The framework calls for assigningresponsibility over all systemically-important firms and critical payment and settlement systems to asingle independent regulator. Further, it calls for higher standards on capital and risk managementfor systemically-important firms; for requiring all hedge funds above a certain size to register with afinancial regulator; for a comprehensive framework of oversight, protection and disclosure for theover-the-counter derivatives market; for new requirements for money market funds; and forstronger resolution authority covering all financial institutions that pose systemic risks to theeconomy.

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March 31, 2009 | GAO Report: March 2009 Status of Efforts to Address Transparency and

Accountability Issues (GAO-09-504)

The General Accounting Office (GAO) releases a report on the status of efforts to addresstransparency and accountability issues for the Troubled Asset Relief Program (TARP). The reportprovides information about the nature and purpose of TARP funding through March 27, 2009,

Crisis Timeline

Documents

Transcript of Crisis Timeline