CHRONOLOGY OF THE FINANCIAL CRISIS

June 2007 Two hedge funds belonging to New York investment bank Bear Stearns collapse as a result of the subprime mortgage crisis. The failure of the funds cause investor losses of some $1.8 billion.

July-August 2007 German banks -- including IKB, Sachsen LB, WestLB and BayernLB -- are caught in the crisis. Multi-billion euro bailouts are needed to stabilize the banks' balance sheets.

September 2007 Worried customers line up outside branches of the British bank Northern Rock to pull out their savings.

October 2007 US financial services company Citigroup's profits collapse. From then on, one financial group after another announce billions of dollars of writedowns and high losses.

January 2008 Swiss bank UBS announces writedowns of more than $18 billion for 2007 due to turbulence in US property markets. In April, the bank announces a further $19 billion in writedowns.

February 2008 US Congress approves an economic stimulus package of about $150 billion.

March 2008 Bear Stearns stands on the brink of collapse, leading to JP Morgan Chase acquiring the investment bank under pressure from the US Federal Reserve. The Federal Reserve assumes the risk on $30 billion in Bear Stearns investments.

April 2008 Deutsche Bank announces a loss of €141 billion ($203 billion) for the first quarter -- the bank's first quarterly loss in five years.

July 2008 Californian mortgage bank IndyMac collapses. US mortgage giants Fannie Mae and Freddie Mac fall into increasing difficulties. In Spain, real-estate and construction group Martinsa-Fadesa is forced to declare bankruptcy.

September 2008 The US government takes over Fannie Mae and Freddie Mac. The crisis at Lehman Brothers, a US investment bank, becomes acute. Other financial institutions such as investment bank Merrill Lynch, insurance corporation AIG, and Washington Mutual -- the biggest US savings bank -- are all affected.

September 15, 2008 "Black Monday." Lehman Brothers declares bankruptcy, Merrill Lynch is purchased by Bank of America, and AIG announces it needs billions in stop-gap loans. Bank writedowns from around the world total nearly $500 billion.

September 16, 2008 News that AIG, the world's largest insurer, is threatened with insolvency creates massive instability in international financial markets. Efforts by the insurance industry to save the company founder. Finally, the Federal Reserve announces it will provide AIG with an $85 billion loan in exchange for a nearly 80 percent stake in the troubled giant.

September 17, 2008 Scottish mortgage bank Halifax Bank of Scotland (HBOS) captures worldwide attention with more bad news. The stricken bank desperately seeks investors. Bank of Scotland enters talks with Lloyd's, according to the BBC. News breaks that the state-owned German development bank KfW transferred €300 million ($426 million) to Lehman Brothers in New York just prior the investment bank's collapsed. More than half of the sum is lost.

September 21, 2008 US Treasury Secretary Henry Paulson announces the planned creation of a $700 billion rescue package to buy bad credit from failing banks. After a full weekend of negotiations in Washington, the fate of the bill is to be decided within a week.

September 22, 2008 News of the possible $700 billion bailout calms the financial markets only temporarily. Before long the price of oil rises more than $25 in just a few hours -- the highest absolute hike in one day since oil prices began to be monitored. Experts see this as a reason to be skeptical of the bailout. The dollar also loses considerable value.

September 23, 2008 The price of crude oil eases during trading on the Asian markets. Traders attribute the price decrease to investors cashing in on profits.

September 24, 2008 Powerful US investor Warren Buffett makes headlines with a hefty investment in Goldman Sachs. Analysts hail the legendary financial strategist as a savior.

September 25, 2008 A summit in the White House to discuss the rescue package falters. A few hours later, bank supervisors announce that US savings bank Washington Mutual is broke.

September 28, 2008 It looks as though both Democrats and Republicans in the US Congress would support the $700 billion bailout plan for needy banks.

September 29, 2008 The financial crisis reached new heights in Europe. German mortgage bank Hypo Real Estate is bailed out with €35 billion ($50 billion). British mortgage lender Bradford & Bingley and Belgian-Dutch Hypo Real Estate Holding AG are both bailed out with sums in the billions of euros. US representatives reject the $700 billion bailout package, and stock markets collapse around the world.