FACTBOX: A week that changed Wall Street and beyond

Mon Sep 22, 2008 1:40am EDT
 
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(Reuters) - Wall Street's landscape was transformed in just over a week, and the government made an unprecedented intervention to prop up chaotic financial markets. Here is a chronology of key events in probably the most tumultuous period in U.S. financial history since the Great Depression.

Friday Sept 12:

- Timothy Geithner, president of the New York Federal Reserve Bank, convenes an emergency meeting with Treasury Department officials and top executives at all the major Wall Street banks, including Citigroup, JP Morgan & Chase, Merrill Lynch, in an attempt to rescue ailing investment bank Lehman Brothers. A sticking point is the government's reluctance to provide financial support for a deal.

Saturday, Sept 13:

- Discussions continue at the New York Fed's Lower Manhattan building, and British bank Barclays plc emerges as a leading contender to buy Lehman, even as other major banks drop out of the running;

- A few blocks away, troubled insurer American International Group, which insured billions of dollars worth of collateralized debt obligations, begins talks with New York State's insurance superintendent as it fights for its survival.

Sunday, Sept 14:

- Lehman finds no buyer, but Bank of America reaches an agreement to buy Merrill Lynch, which is forced into the deal due to fears it might also fail because of a loss of investor confidence. The fears center on toxic debt remaining on Merrill's balance sheet and its difficulty raising new capital.

- A group of 10 global banks and securities firms, including JP Morgan Chase and Goldman Sachs announce a $70 billion loan program that they can tap to help ease a credit shortage;

Monday, Sept 15:

- Shortly after midnight, 158-year-old Lehman files for Chapter 11 bankruptcy;

- The Dow Jones Industrial Average plunges more than 500 points in its biggest drop since September 17, 2001, the first day of trading following the September 11 attacks. Meanwhile, the FTSE 100 falls to its lowest level since June 2005.

Tuesday, Sept 16:

- AIG is taken over by the federal government -- getting an $85 billion revolving loan it has two years to pay off in exchange for a 79.9 percent government stake in the company. New York state will lead a task force to oversee AIG's sale of assets as it pays off that loan;

- Barclays agrees to pay $1.75 billion for some of Lehman's prime assets, including its Manhattan skyscraper and North American investment banking and capital markets businesses.

Wednesday, Sept 17:  Continued...

 

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