There were warning signs as early as 2004, but financial regulators were found wanting when Lehman Brothers suddenly went bust.
The worst financial crisis since the Great Depression hit the US markets and rapidly spread across the globe in 2008. There were warning signs as early as 2004, but a combination of exuberance, ignorance, complacency and greed ensured that the party in the financial markets went on uninterrupted for another three years before the problems became too big to ignore.
Here's a timeline of how the events unfolded:
May: Edward Gramlich, Governor of the US Federal Reserve says rapid growth of subprime loans is “associated with higher levels of delinquency, foreclosure, and, in some cases, abusive lending practices.”
August: Raghuram Rajan, then Economic Counsellor and Director of the IMF's Research Department, warned the world about the impending doom in a speech.
September: One of the UK's biggest mortgage providers, Northern Rock, seeks emergency funding from the Bank of England.
March: JP Morgan Chase takes over Bear Stearns, another Wall Street giant that could not weather the storm without assistance.
July: Merrill Lynch announces a $4.9-billion loss for the April-June quarter
July: The Securities Exchange Commission (SEC) bans “naked” short selling of shares in Fannie Mae and Freddie Mac, mortgage finance companies
September 7: The US government commits to provide up to $100 billion to Fannie Mae and Freddie Mac that hold or guarantee $5 trillion, half of all US mortgages
September 15: Lehman Brothers files for bankruptcy protection
September 15: Bank of America buys Merrill Lynch
September 16: The Federal Reserve bails out American Insurance Group with an $85- billion infusion. The government takes 79.9 percent stake
September 18: The US announces $700-billion proposal to buy toxic assets from US banks
September 30: Icelandic bank Glitnir is nationalized with a capital infusion of $1 billion
October 3: The US creates the Troubled Asset Relief Programme (TARP)
October 8: The UK announces its policy in bailing out delinquent financial institutions
October 16: The Swiss government bails out UBS and Credit Suisse
October 27: The International Monetary Fund bails out Hungary and Ukraine
November 9: China announces $600 billion fiscal stimulus
November 10: The US Treasury announces a new rescue package for AIG
November 24: The US government bails out the Citi Group
2009February 17: President Obama signs into law a $789-billion stimulus bill.