BACKGROUND: Timeline of dramatic autumn after Lehman downfall

Sep 12, 2009, 3:42 GMT

New York - The bankruptcy of US investment bank Lehman Brothers on September 15, 2008, brought about a massive downturn in the world of global finance. Here is a chronology of those dramatic autumn months.

September 7: US government seizes control of mortgage giants Fannie Mae and Freddie Mac in 200-billion-dollar bailout.

September 15: 'Black Monday' on Wall Street: Lehman Brothers files for bankruptcy, while its rival Merrill Lynch avoids a similar fate by merging with Bank of America. The news shatters confidence in the financial system, credit markets begin to freeze up and stock markets plunge around the world.

September 17: The US Federal Reserve is forced into rescuing insurance giant American International Group (AIG) with an 85- billion-dollar credit.

September 19: President George W Bush's administration asks Congress for a 700-billion-dollar financial package to keep the rest of the country's major banks afloat.

September 21: Goldman Sachs and Morgan Stanley, the two remaining investment banking giants in the United States, declare themselves bank holding companies in a bid to get access to government loans.

September 25: Washington Mutual becomes the largest bank to fail in US history, rescued by rival JPMorgan Chase.

September 29: Bail-outs of banks are announced in Britain, Germany and the Benelux countries.

September 30: Ireland declares a 400-billion-dollar guarantee of all assets at its six largest banks to keep them from collapse.

October 3: The 700-billion-dollar rescue package is signed into law by President Bush, becoming the largest capital-market intervention in US history. Wells Fargo Bank and the fourth largest US bank Wachovia announce a merger.

October 7: Iceland's Prime Minister Geir Haarde warns of a looming state bankruptcy and takes the reins of the country's failing banking system.

October 8: Six major central banks lower interest rates. The joint action does little to calm global stock markets.

October 13: Germany's government presents a financial rescue package of 500 billion euros (729 billion dollars) for its own banks. France promises its own 360-billion-euro plan. Other European Union members follow suit.

October 29: US Federal Reserve slashes interest rates by 0.5 percentage points to 1 per cent, the lowest level since June 2004.

October 30: Japan announces 26.9-trillion-yen (276.33-billion- dollar) stimulus package to help jump-start economy.

November 9: China announces 4-trillion-yuan (588-billion-dollar) economic stimulus package.

November 15: Leaders of G20 nations at meeting in Washington pledge to better regulate global financial markets and take steps to halt a global economic slide.

December 1: US has been in recession for a year, the National Bureau of Economic Research says.

December 4: The European Central Bank cuts interest rates by an unprecedented 0.75 percentage points to 2.5 per cent. The Bank of England reduces borrowing costs by 1 percentage point.

December 12: European Union leaders agree to 200-billion-dollar stimulus package equal to 1.5 per cent of gross domestic product.

December 16: US Federal Reserve cuts interest rates to an unprecedented 'range' of 0-0.25 per cent.