Happy Anniversary!

Actually, there is nothing happy about it. 

Today marked 5 years since the start of the financial crisis. 

On August 9, 2007, French Bank BNP Paribas froze withdrawals on three money market mutual funds that had an exposure to US subprime mortgages. This alarmed global banks, who immediately stopped lending to each other. 

The credit freeze instantly turned ugly forcing the European Central Bank (ECB) to pump in €95 billion into the financial markets to free up the flow of capital between banks. This was the first time since the 9/11 terrorist attacks in New York that the ECB had to so dramatically step in to prevent the US sub-prime mortgage virus from spreading through the  German, French and Dutch banking systems. 

Wall Street’s Dow Jones index tumbled 387 points and the US Federal Reserve injected $24billion into the banking system, while the Bank of Canada said it was ready to provide liquidity.

A vital nerve in the international finance system was touched. Life after that would never be the same in these circles. 

President George Bush passed an ironic comment that day: "The fundamentals of our economy are strong.” Yes, Mr ex-President, in retrospect, we all know how that eventually played out. 
A year later, the credit crunch eventually led to the collapse of Lehman Brothers and triggered the deepest global recession since World War II.