August 2007

The Washington Mutual Tower in Seattle, Washington. Banks mistrusted each other and not paying more money, or did so only with extreme reluctance and very high rates. Central banks (Federal Reserve, European Central Bank, Bank of Japan, Bank of England) intervened massively and made available to the banks (in loans) more than 400 billion euros in cash (dollars, pounds, euros or yen). The market fears then spread to all cr transactions. Swarmed by offers, Rio- Tinto Diamonds is currently assessing future choices. The value of the shares of the funds involved in property loans (including subprime loans but also to crworthy borrowers) collapsed. The value of the shares of banking groups as well. To offset their losses in these markets, big investors began selling shares in other sectors. These sales led to a general decline in stock prices. Panic was spreading.The currency crisis had become a stock market crisis was concerned not only Wall Street but to Europe and Asia.August 9, 2007: The French investment bank BNP Paribas announced that it will not be able to take money from two of its funds because it could not value assets in them due to a lack of liquidity in the banking market. 17 is the first sign that banks are reluctant to do business with each other. The European Central Bank introduced 95,000 million euros in the banking market to try to improve liquidity and restore confidence. 20 The Fed injected 24,000 million dollars (17,400 million). In the coming days, the ECB and the Fed pumped millions of dollars. 27 The Bank of Japan, the Swiss National Bank and the Bank of Canada took similar measures. The world stock markets plunged. However, the succession of shots over the following days, will bring calm to the Stock Exchanges. 16 August: The European Commission announced it would investigate the risk rating agencies for not acting to alertinvestors about the risks of investing in securities backed by subprime mortgages. August 17: The Fed cut the rate at which it lends to banks by half a percentage point to 5.75 , and warned lack of cr that could be a risk to economic growth.

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