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ERM frameworks [6]

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Bullet points include: Rising defaults on US sub-prime mortgages, Bear Stearns, losses spill over into other global financial markets including CP market (and CDOs, SIVs). Critical phase, late Summer and Autumn 2008. Problems at Fannie Mae and Freddie Mac. Collapse of Lehman Brothers, support package for AIG (mid Sept 2008). Breakdown of interbank funding markets, broader institutional distress, governments recapitalise banks, guarantee debts/depositors, introduce/increase size of liquidity schemes (Oct 2008). Subsequent wider impact on developed Western economies. But was the problem merely nationalised? (Euro sovereign debt crisis?)

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