The Panic of 2008

The Panic of 2008

Causes, Consequences and Implications for Reform

Edited by Lawrence E. Mitchell and Arthur E. Wilmarth, Jr

The Panic of 2008 brings together scholars from a variety of disciplines to examine the causes and consequences of the global credit crisis, the subsequent collapse of the financial markets, and the following recession. The book evaluates the crisis in historical context, explores its various legal, economic, and financial dimensions, and considers various possibilities for reform. The Panic of 2008 is one of the first in-depth efforts to study the crisis as it was in the very earliest stage of resolution, and establishes a foundation for thinking about and evaluating current reform efforts and the likelihood of recurrence.

Chronology of the panic of 2008

Edited by Lawrence E. Mitchell and Arthur E. Wilmarth, Jr

Subjects: economics and finance, financial economics and regulation, law - academic, finance and banking law


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 participating 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for low-income consumers. 12 November – President Clinton signed into law the Gramm-LeachBliley Act, which, in part, repealed the provisions of the Glass Steagall Act that separated commercial and investment bank activities. 2000 ● ● 10 March – The dot-com bubble numerically burst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 jurisdiction, requirements, and procedures of the Commodities Futures Trading Commission (‘CFTC’). First, the Act repealed an earlier 22 M2379 - MITCHELL PRINT.indd 22 20/9/10 11:09:25 Chronology of the panic of 2008 23 ban on single-stock futures...

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