January 2009
30 January
Ford Motor revealed that is drawing down US$10.1bn from its credit lines from its banks because of “concerns about the instability of the capital markets”.
Japanese industrial production fell a larger-than-expected 9.6% and unemployment rose sharply to 4.4% in December.
29 January
The US House of Representatives has passed President Barack Obama's US$819bn economic stimulus package. The bill would cut taxes for people and businesses by US$275bn, while pumping more than US$540bn into a range of initiatives including road and bridge repair, increased unemployment benefits, investment in new technology and renovations to 10,000 schools.
Canada's Conservative government has unveiled a C$40bn (US$32bn) stimulus package that includes infrastructure spending and tax cuts. Canada, which has not run a budget deficit for more than a decade, will be on course for a C$85bn deficit over five years, according to government estimates.
New Zealand’s central bank cut its official rate by a larger than expected 1.5 percentage points to 3.5% and warned that the country was likely to remain in recession for much of 2009.
27 January
Iceland’s government collapsed following political turmoil prompted by the global financial crisis.
The Japanese government threw a US$16.7bn lifeline to companies threatened by the global financial crisis, to try to shield the shrinking economy from more job losses and bankruptcies.
ING , the Dutch banking and insurance group, revealed fresh losses in the fourth quarter of €2bn on its structured credit portfolio, prompting it to seek new state guarantees, replace its chief executive and cut 7,000 jobs.
Société Générale and Crédit Agricole are to merge their asset management businesses to form Europe’s fourth largest operator with €638bn under management.
TheFrench government is to provide €5bn in credit guarantees to help Airbus sell aircraft to customers that are struggling to secure finance for their purchases.
23 January
The UK is now in recession for the first time since 1991, official government figures have confirmed. Gross domestic product fell by 1.5% in the last three months of 2008 after a 0.6% drop in the previous quarter.
Fortis Bank , the Belgian state-owned lender, will record a net loss of up to €19bn for 2008 due to the financial crisis and the break-up of the banking and insurance group that owned it.
22 January
The British pound plunged to its lowest level against the dollar since 1985 amid uncertainty about the government banking support package. Sterling slid another 1.6% against Britain’s main trading partners, taking its losses since 15 January to almost 6%. Against the dollar, the pound closed at US$1.3733, a fall of 11 cents this week.
21 January
The Bank of England will start to buy corporate bonds in large quantities within weeks, said Mervyn King, governor of BoE, speaking to employers at a Confederation of British Industry (CBI) dinner in Nottingham.
The French government said that it would earmark up to €6bn for a rescue plan for its car industry.
20 January
Spain became the first country to lose its triple A credit rating from Standard & Poor’s since Japan in 2001, spurring a slide in the euro as the economic outlook for Europe worsened.
Denmark will offer up to Dkr100bn (€13.4bn) in loans to recapitalize its struggling banks and encourage them to restart lending as the country’s economy continues its slide into recession.
UBS announced that it would buy the commodity index business of AIG , the US insurer, for US$15m, after it spent the past two months divesting non-core commodities activities.
19 January
TheUK government has announced a second package of measures to encourage banks to lend to individuals and businesses. The list of measures includes a scheme to offer insurance against banks losing more money from the toxic debt that started the credit crunch, while the Bank of England has been given a new role - it will be able to buy up to £50bn of assets directly from firms. The government is also increasing its stake in RBS to nearly 70% from 58%.
Royal Bank of Scotland(RBS) announced it expects to suffer a loss of up to £28bn last year as a result of the credit crunch.
The US Senate has released the remaining US$350bn of the Troubled Asset Relief Programme (TARP) funds. Bond insurers Ambac Financial Group and MBIA have asked for some of the money arguing that a capital infusion from the government would help revitalise public-debt markets.
Euro zone interest rates fell by half a percentage point to the lowest level (2%) in more than three years as the European Central Bank said it expected the single currency area’s recession to deepen and signaled borrowing costs could fall further.
16 January
Citigroup announces plans to split in two, as it reported a quarterly loss of US$8.29bn (£5.6bn). It will realign into two new firms, Citicorp and Citi Holdings. Citicorp will handle the company's traditional banking work, while Citi Holdings will take on the firm's riskiest investment assets.
Bank of America will receive US$20bn (£13.4bn) in fresh US government aid and US$118bn worth of guarantees against bad assets.
The Irish government moves to nationalize Anglo Irish Bank after its funding problems continued.
14 January
Royal Bank of Scotland has raised about US$2.4bn by selling its stake in Bank of China.
The UK government has unveiled a plan to guarantee up to £20bn of loans to small businesses to help them survive the economic downturn. In return for a fee, the state will, in effect, insure banks against companies defaulting on loan repayments.
Barclays is cutting about 2,100 jobs worldwide in investment banking and money management in an attempt to slash its costs. The company is cutting 1,300 people from Barclays Capital , the debt-focused investment banking business, 500 from the Barclays Wealth private banking arm, and 330 in Barclays Global Investors , an asset management business. Overall, the cuts amount to 7% of the three divisions’ staff.
Company bankruptcies in Japan jumped 24.7% in December from a year earlier.
13 January
German Chancellor Angela Merkel has unveiled an economic stimulus package worth about €50bn to kick-start Europe's largest economy.
12 January
The UK Treasury is to own 43.4% of the merged Lloyds HBOS bank , after few shareholders bought new shares. Only 0.24% of the 7.5 billion shares HBOS offered to existing shareholders were taken up, while Lloyds TSB saw only 0.5% of its offered shares purchased.
The sharp slowdown in theUS economy will push the federal budget deficit to more than US$1 trillion, the non-partisan Congressional Budget Office (CBO) says.
More US workers lost jobs last year than in any year since World War II, with employers axing 2.6 million posts and 524,000 in December alone. The US jobless rate rose to 7.2% in December, the highest in 16 years.
South Korea's central bank has slashed interest rates by half a percentage point to a record low of 2.5%.
9 January
The German governmen t will inject a further €10bn into Commerzbank and take a 25% stake to allow it to complete the takeover of Dresdner Bank from insurance giant Allianz. The capital increase comes two months after the bank received an €8.2bn injection from the government’s financial sector bail-out fund.
8 January
The Bank of England has cut interest rates to 1.5%, the lowest level in its 315-year history.
7 January
Bank of America is selling a US$2.83bn (13%) chunk of its holding in China Construction Bank at a 12% discount, according to a term sheet obtained by Reuters.
2 January
Citigroup’s top executives, including CEO Vikram Pandit and Robert Rubin, a director and senior adviser, will forgo their 2008 bonuses amid internal and external pressure to atone for the company’s huge losses and a US$300bn government bail-out.
Aberdeen Asset Management buys Credit Suisse ’s fund arm for up to £250m in shares. The Swiss bank will own 25% of Aberdeen.
UBS has become the first overseas investor to offload its holding in a major Chinese bank as it raised US$835m by selling its 3.4bn shares in the Hong Kong-listed arm of Bank of China.
1 January 2009
London’s leading stocks endured their worst annual falls in at least 24 years, while in Europe and Asia, some markets ended the year by notching up their worst performances since records began, according to the Financial Times. The FTSE 100 lost 30.9% in 2008, which was the blue-chip index’s worst annual fall since it was created in 1984. Germany’s Xetra Dax fell 40.3%, its worst annual performance in its 20-year history, and the CAC 40 in Paris was down 42.1%. FTSE Eurofirst 300 suffered an annual decline of 44.7%, its worst year since the index was constituted in 1986. The Nikkei 225 index in Tokyo recorded a 42.1% fall, above its last biggest annual loss of 38.7% in 1990, while Korea’s Kospi index ended the year with a loss of 40.7%. In New York, the S &P; 500 has already fallen 41% this year, marking its worst run since a drop of 47.1% in 1931 during the Great Depression.
30 December 2008
The Austrian government is preparing to take management control of Vienna-based Bank Medici after the bank revealed clients had lost money in funds it ran which invested with New York financier Bernard Madoff.
The US Treasury department unveiled up to US$6bn in aid for GMAC , the financial services group which is critical to part-owner General Motors‘ turnaround, after the Fed gave GMAC the green light to become bank holding company.