Story Of The Recession Links
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The Recent Recession in the UK • The current UK Recession can be traced back to 2007 and UK financial institutions involvement in the USA • In February 2007 UK Bank HSBC said that it had seen a 20% rise in bad debt due to problems in the sub prime market in the US • The sub prime market is where banks lend money to less credit worthy individuals – those more likely to default on their loans • In April 2007 US lender New Century Financial filed for bankruptcy • The Credit Crunch had begun. Financial institutions had their money tied up in loans and didn’t have enough for the day-to-day running of the business. Some went bankrupt, some taken over and some bailed out by Government
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Transcript of Story Of The Recession Links
The Recent Recession in the UK
• The current UK Recession can be traced back to 2007 and UK financial institutions involvement in the USA
• In February 2007 UK Bank HSBC said that it had seen a 20% rise in bad debt due to problems in the sub prime market in the US
• The sub prime market is where banks lend money to less credit worthy individuals – those more likely to default on their loans
• In April 2007 US lender New Century Financial filed for bankruptcy
• The Credit Crunch had begun. Financial institutions had their money tied up in loans and didn’t have enough for the day-to-day running of the business. Some went bankrupt, some taken over and some bailed out by Government
The story of the recession HSBC warns of Subprime
losses
New Century goes bust
Credit markets freeze
Run on The Rock
Bear Stearns Rescue
Fannie Mae Rescue
Lehman Brothers goes bankrupt
Lloyds takes over HBOS
$700Bn Bailout approved by congress
UK Government rescues RBS & Lloyds-HBOS
Fed cuts key rate to near zero
US congress passes $787Bn stimulus
G20 Summit in London
UK Budget reveals huge deficit
