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1. 2008 Financial Crisis
Group members:
Sonali Lachhani
Priyanka More
Sumeet Kirve
Dishant Nagrani
Manoj Malvi

2. Initialization of crisis
• Federal reserve chairman lowers interest rate
to 1%.
• Banks on Wall St. started taking loan form
Federal at 1% other countries like China,
Japan, Middle east also gave loans to banks
on Wall St.
• Banks started leverages.

4. When Lehman became Layman
• Lehman Bothers became 4th largest
investment bank in the US.
• It became bankrupt as a large part of their
loan portfolio comprised of loans for buying
real estate.
• Lehman Brothers was a big player in the
mortgage-backed securities market.

5. Effects on India
•$16 Billion outflow from India in 2008
•Inflation at 12%
•$291 Billion – Indian FX reserves as of 03 Oct.
•Indian Oil Corp costs to rise 70% to $45 Billion
•Industrial growth plummets to 1.3% in August
•Sensex down ~50% in 2008
•Sensex up ~50% from 2004

6. Effects on World
Effects on USA
•• Stock market tanked
March 2008, acquisition of an investment
• Many banks,STEARNS. lenders, real estate
bank BEAR mortgage
• investors and hedge funds suffered huge
September 2008, Lehman brothers
bankruptcy.
losses
•• Credit got tighter
Closing of Washington Mutual.
•• Effects on jobs
Provision of loan to AIG by US Federal reserve.
• Conversion of investment banks into
commercial banks.

7. GLOBAL FINANCE CRISIS- "Red September"
September 14, 2008:
Merrill Lynch sold to Bank of
America amidst fears of a
liquidity crisis and Lehman
Brothers collapse September 15, 2008:
Lehman Brothers files for
bankruptcy protection
September 25, 2008:
Washington Mutual was
September 19, 2008: seized by the Federal
Paulson financial rescue Deposit Insurance
plan unveiled after a volatile Corporation, and its banking
week in stock and debt assets were sold to JP
markets. Morgan Chase for $1.9bn.
Sep-08 Sep-08 Sep-08 Sep-08 Sep-08 Oct-08
September 17, 2008: September 29, 2008:
September 7, 2008:
The US Federal Reserve The House rejected bail-out
Federal takeover of Fannie
loans $85 billion to bill, DJIA down 7%
Mae and Freddie Mac October 3,2008: The
American International
Group (AIG) to avoid House pass the bail out bill
bankruptcy.
September 16, 2008:
Moody's and Standard and
Poor's downgrade ratings
on AIG's credit on concerns
over continuing losses to
mortgage-backed
securities, sending the
company into fears of
insolvency.

8. Conclusion