Financial crisis timeline: how did we get here?

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In June 2003, the Federal Reserve lowered the prime rate to 1 percent. It was the lowest prime rate in 45 years. It was also the starting point for the financial crisis that has led to hundreds of billions of dollars in bailouts and the demise of investment banks in the U.S., turmoil in emerging markets around the world and a global credit crisis responsible for trillions of dollars in losses. Yet people still ask ?How did we get here??

The University of Iowa (UI) Center for International Finance and Development (UICIFD) has attempted to answer that question by creating a detailed timeline of the events leading up to the economic collapse. The 87-page timeline, which is available in PDF or HTML format at www.uiowa.edu/ifdebook/timeline/timeline1.shtml uses news reports to document struggling investment banks, failing mortgage companies, worsening housing reports, shrinking dividends and earnings, and other factors that were warning of the impending financial collapse. The success of the effort is demonstrated by the popularity of the website which surpasses all other search engine results for credit crisis timeline.

?The timeline is pretty gripping reading for those who have an interest in the worst financial and economic crisis since the Great Depression,? said Enrique Carrasco, a UI law professor and director of Center.

Carrasco started the UICIFD in 1998 to objectively analyze complex global financial and development issues for an audience who are not financial experts.

?Our research is specifically designed for people who aren’t experts in these issues,? agrees HeeJin Lee, a third year law student, one of the UICIFD researchers and its managing editor. ?It’s easier to understand than most people think, and this is a way we can present the core of it for people who aren’t financial experts to comprehend.?

The timeline was compiled by Jason Cox, a law student. It follows the economic waves around the globe linking news stories both within and beyond U.S. borders. It includes small stories that may have been missed in the flood of bad news as well as the big headlines. The attempts of other governments and organizations such as the European Union (EU), International Monetary Fund (IMF) and World Bank trying to slow the collapse are also explored.

The financial meltdown is not the first research project for the UICIFD. Past topics include reforming the World Bank and IMF, the economic future of Cuba, the impact of the North American Free Trade Agreement (NAFTA) and China’s relationship with the World Trade Organization. In normal years, the Center’s student researchers spend the bulk of the year working, publishing most of the work on the UICIFD website when it is complete. The students’ research is compiled in an e-book that has grown to more than 300 pages in the past 10 years. The Center is co-hosting a symposium with the law school’s International Law Journal about the global credit crunch and economic crises on February 20 in the Boyd Law Building on the University of Iowa campus in Iowa City.