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Summer 2007
Markets first respond on a large scale to concerns thatmortgage-backed securities might significantly underperform expectations. -
FED annoucement
Federal Reserveannounces that it “will provide reserves as necessary” amidst strains in money and credit markets. -
Monetary policy meassures
FOMC lowers target federal funds rate 50 basis points to 4.75percent, the first of a series of rate cuts. -
TAF
Fed announces creation of the Term Auction Facility (TAF),the first of several new tools designed to provide liquidity to markets. -
TSLF
Fed creates Term Securities Lending Facility (TSLF), which trades banks’ illiquid assets, including mortgage-backedsecurities, for liquid Treasury securities. -
PDCF
FED creates the Primary Dealer Credit Facility (PDCF), allowing it to lend to primary dealers for the first time. -
Bear Sterns
Fed announces it will provide term financing for JPMorgan Chase to purchase Bear Stearns by taking risky securitiesoff Bear’s balance sheet via the PDCF. -
Recession...
The Business Cycle Dating Committee of the NationalBureau of Economic Research announces that the recession began in December 2007. -
The lower bound...
FOMC votes to establish a range for the fed funds rate of 0 to 0.25 percent. -
Fannie and Freddie
Federal Housing Finance Agency (FHFA) places Fannie Mae and Freddie Mac in government conservatorship following increasing scrutiny over their soundness -
Lehman
Lehman Brothers files for Chapter 11 bankruptcy protection. -
TARP
President Bush signs into law the Emergency EconomicStabilization Act of 2008, establishing the $700 billionTroubled Asset Relief Program (TARP) -
TALF
Fed announces the creation of the Term Asset-BackedSecurities Loan Facility (TALF), supporting theissuance of asset backed securities. Becomes operational in March 2009.
Fed announces program to purchase direct obligations of Fannie Mae and Freddie Mac, and mortgage-backed securities backed by them. Purchases begin in January 5, 2009
