Lehman Brothers
On Sept. 15, 2008, Lehman Brothers, a well-known and respected investment bank, filed for bankruptcy protection after the Bush Administration’s Treasury Secretary, Hank Paulson, refused to grant them a bailout.
What was a major cause of the Great Recession of 2008 2009?
The Great Recession—sometimes referred to as the 2008 Recession—in the United States and Western Europe has been linked to the so-called “subprime mortgage crisis.” Subprime mortgages are home loans granted to borrowers with poor credit histories. Their home loans are considered high-risk loans.
What was the name of the company that went bankrupt in 2008?
September 15, 2008: Lehman Brothers went bankrupt after the Federal Reserve declined to guarantee its loans, causing the Dow Jones to drop 504 points, its worst decline in seven years. The same day, Bank of America purchased Merrill Lynch. September 16, 2008: The Federal Reserve took over American International Group.
What did the Federal Reserve do in the financial crisis of 2007?
December 12, 2007: The Federal Reserve instituted the Term Auction Facility to supply short-term credit to banks with sub-prime mortgages. February 13, 2008: The Economic Stimulus Act of 2008 was enacted, which included a tax rebate.
What was the Emergency Economic Stabilization Act of 2008?
October 3, 2008: Congress passed the Emergency Economic Stabilization Act of 2008. November 25, 2008: The Term Asset-Backed Securities Loan Facility was announced. December 16, 2008: The federal funds rate was lowered to zero percent. January 2009: Two of the three Big Three automobile manufacturers received a bailout from the TARP program.
How did lax regulation allow predatory lending in the private sector?
Lax regulation allowed predatory lending in the private sector, especially after the federal government overrode anti-predatory state laws in 2004. The Community Reinvestment Act (CRA), a 1977 US federal law designed to help low- and moderate-income Americans get mortgage loans encouraged banks to grant mortgages to higher risk families.
