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"Chronology of the panic of 2008" [2010] ELECD 689; in Mitchell, E. Lawrence; Wilmarth, Jr, E. Arthur (eds), "The Panic of 2008" (Edward Elgar Publishing, 2010)

Book Title: The Panic of 2008

Editor(s): Mitchell, E. Lawrence; Wilmarth, Jr, E. Arthur

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849802611

Section Title: Chronology of the panic of 2008

Number of pages: 15

Extract:

Chronology of the panic of 2008
1997
The Asian Financial Crisis led to slumping currencies, devalued
stock markets and other asset prices, and a rise in private debt.
In response, the International Monetary Fund (`IMF') developed
country bailout programs that were conditional upon the partici-
pating country making reforms such as cutting back on government
spending to reduce deficits, allowing insolvent banks and financial
institutions to fail, and aggressively raising interest rates. The rising
savings rates increased cash flow to United States capital markets
and in turn into funding real property markets.


1999

30 September ­ Fannie Mae eased credit requirements to increase
home ownership rates for low-income consumers.
12 November ­ President Clinton signed into law the Gramm-Leach-
Bliley Act, which, in part, repealed the provisions of the Glass Steagall
Act that separated commercial and investment bank activities.


2000

10 March ­ The dot-com bubble numerically burst when the
NASDAQ Composite index peaked at 5048.62; more than double
its value just a year before. The burst continued into 2002 and
resulted in a decline of almost 80 per cent of the NASDAQ index
and about 60 per cent in the S&P 500 index. In response, the US
Federal Reserve Board eased its monetary policy.
21 December ­ President Clinton signed into law the Commodities
Futures Modernization Act of 2000 that changed the jurisdic-
tion, requirements, and procedures of the Commodities Futures
Trading Commission (`CFTC'). First, the Act repealed an earlier


22
 Chronology of the panic of 2008 23

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