The Peabody Trust was founded in 1862 as the Peabody Donation Fund and now brands itself as Peabody.. It is one of London's oldest and largest housing associations with around 55,000 properties across London and the South East, it is a community benefit society and urban regeneration agency, a developer with a focus on regeneration, a provider of an extensive range of community programmes. The Trust was founded in 1862 by London-based American banker George Peabody, who in the 1850s had developed a great affection for London, determined to make a charitable gift to benefit it, his initial ideas included a system of drinking fountains, or a contribution to the "ragged schools" of the Earl of Shaftesbury. In March 1859, however, he settled on establishing a model dwellings company. Three years in a letter to The Times on 26 March 1862, he launched the Peabody Donation Fund, with an initial gift of £150,000; the aim of the organisation, he said, would be to "ameliorate the condition of the poor and needy of this great metropolis, to promote their comfort and happiness".
The paper reported, "We have today to announce an act of beneficence unexampled in its largeness and in the time and manner of the gift". Shortly before his death in 1869, Peabody increased his gift to £500,000; the Peabody Trust was constituted by Act of Parliament, stipulating its objectives to work within London for the relief of poverty. This was to be expressed through the provision of model dwellings for the capital's poor; the first block, designed by H. A. Darbishire in a red-brick Jacobethan style, opened in Commercial Street, Spitalfields, on 29 February 1864, it cost £22,000 to build, contained 57 "dwellings" for the poor, nine shops with accommodation for the shopkeepers, baths and laundry facilities on the upper floor. Water-closets were grouped in pairs with one shared between every two flats; this first block was followed by larger estates in Islington, Shadwell, Westminster and elsewhere. By 1882 the Trust housed more than 14,600 people in 3,500 dwellings. By 1939 it owned more than 8,000 dwellings.
In its early days, the Trust imposed strict rules to ensure that its tenants were of good moral character. Rents were to be paid weekly and punctually. Peabody wants to help people make the most of their lives by providing good-quality affordable homes, work with communities and promote wellbeing, it will: put the most vulnerable first. The Group worked with the Royal Borough of Greenwich and the London Borough of Bexley to bid for Greater London Authority housing zone status, which led to a c£80 million investment; as well as providing thousands of new homes in the area, Peabody says it will provide firm foundations for Thamesmead’s long term, sustainable rejuvenation by investing in existing homes and services to improve the quality of life for existing residents. Going beyond "bricks and mortar", Peabody says its work with partners will enhance employment, cultural and leisure opportunities for people, supported by socio-economic outputs. Locally. Thamesmead and the surrounding area is a major opportunity area for London.
Crossrail will open at nearby Abbey Wood from 2019, Peabody has said it will capitalise on this, ensuring the right amenities and transport connections are available for the long term sustainability of the area. In 2014 Gallions, Trust Thamesmead and Tilfen Land became part of the Peabody Group; the Peabody Group now comprises two housing associations and Gallions, a number of trading companies.. In July 2017 Peabody merged with Family Mosaic housing association under the "Peabody" name. Housing associations borrow money to pay for new improvements. In March 2011, Peabody raised £200 million on a corporate bond, at a rate among the best secured by a housing association borrowing in its own name. In 2013 it issued a public bond for £350 million. Family Mosaic is a housing association in the United Kingdom, it has over 25,000 homes housing over 45,000 people and is one of the largest housing providers in London and the South East of England. Family Mosaic provide care and support services to over 8,000 people.
Family Mosaic works with young people, helping them into work and promoting better health to young people. In addition to offering specialist housing for people with support needs and social housing for general needs tenants, a third strand of Family Mosaic is its role in assisting people to get onto the property ladder through leasehold shared ownership properties. In April 2017, Family Mosaic announced that it would be launching a 111 home development for private rental tenants. Family Mosaic runs employment training courses and activity groups for its residents, it offers welfare benefits advice. Family Mosaic is a member of the G15 group of housing associations in London. In July 2017 Family Mosaic merged with Peabody Trust housing association under the "Peabody" name. Charlton Triangle Homes -- manages 1,162 homes in the London Borough of Greenwich. Old Oak Housing Association – Owns and manages 669 homes in the London Borough of Hammersmith and Fulham. In 2012, Family
Philanthropy means the love of humanity. A conventional modern definition is "private initiatives, for the public good, focusing on quality of life", which combines an original humanistic tradition with a social scientific aspect developed in the 20th century; the definition serves to contrast philanthropy with business endeavors, which are private initiatives for private good, e.g. focusing on material gain, with government endeavors, which are public initiatives for public good, e.g. focusing on provision of public services. A person who practices philanthropy is called a philanthropist. Philanthropy has distinguishing characteristics separate from charity. A difference cited is that charity aims to relieve the pain of a particular social problem, whereas philanthropy attempts to address the root cause of the problem—the difference between the proverbial gift of a fish to a hungry person, versus teaching them how to fish. In the second century CE, Plutarch used the Greek concept of philanthrôpía to describe superior human beings.
During the Roman Catholic Middle Ages, philanthrôpía was superseded by Caritas charity, selfless love, valued for salvation and escape from purgatory. Philanthropy was modernized by Sir Francis Bacon in the 1600s, credited with preventing the word from being owned by horticulture. Bacon considered philanthrôpía to be synonymous with "goodness", correlated with the Aristotelian conception of virtue, as consciously instilled habits of good behaviour. Samuel Johnson defined philanthropy as "love of mankind; this definition still survives today and is cited more gender-neutrally as the "love of humanity." In London prior to the 18th century and civic charities were established by bequests and operated by local church parishes or guilds. During the 18th century, however, "a more activist and explicitly Protestant tradition of direct charitable engagement during life" took hold, exemplified by the creation of the Society for the Promotion of Christian Knowledge and Societies for the Reformation of Manners.
In 1739, Thomas Coram, appalled by the number of abandoned children living on the streets of London, received a royal charter to establish the Foundling Hospital to look after these unwanted orphans in Lamb's Conduit Fields, Bloomsbury. This was "the first children's charity in the country, one that'set the pattern for incorporated associational charities' in general." The hospital "marked the first great milestone in the creation of these new-style charities."Jonas Hanway, another notable philanthropist of the era, established The Marine Society in 1756 as the first seafarer's charity, in a bid to aid the recruitment of men to the navy. By 1763, the society had recruited over 10,000 men and it was incorporated in 1772. Hanway was instrumental in establishing the Magdalen Hospital to rehabilitate prostitutes; these organizations were run as voluntary associations. They raised public awareness of their activities through the emerging popular press and were held in high social regard—some charities received state recognition in the form of the Royal Charter.
Philanthropists, such as anti-slavery campaigner William Wilberforce, began to adopt active campaigning roles, where they would champion a cause and lobby the government for legislative change. This included organized campaigns against the ill treatment of animals and children and the campaign that succeeded in ending the slave trade throughout the Empire starting in 1807. Although there were no slaves allowed in Britain itself, many rich men owned sugar plantations in the West Indies, resisted the movement to buy them out until it succeeded in 1833. Financial donations to organized charities became fashionable among the middle-class in the 19th century. By 1869 there were over 200 London charities with an annual income, all together, of about £2 million. By 1885, rapid growth had produced with an income of about £ 4.5 million. They included a wide range of religious and secular goals, with the American import, the YMCA as one of the largest, many small ones such as the Metropolitan Drinking Fountain Association.
In addition to making annual donations wealthy industrialists and financiers left generous sums in their wills. A sample of 466 wills in the 1890s revealed a total wealth of £76 million, of which £20 million was bequeathed to charities. By 1900 London charities enjoyed an annual income of about £8.5 million. Led by the energetic Lord Shaftesbury, philanthropists organized themselves. In 1869 they set up the Charity Organisation Society, it was a federation of one in each of the 42 Poor Law divisions. Its central office had experts in coordination and guidance, thereby maximizing the impact of charitable giving to the poor. Many of the charities were designed to alleviate the harsh living conditions in the slums; such as the Labourer's Friend Society founded in 1830. This included the promotion of allotment of land to labourers for "cottage husbandry" that became the allotment movement, in 1844 it became the first Model Dwellings Company—an organization that sought to improve the housing conditions of the working classes by building new homes for them, while at the same time receiving a competitive rate of return on any investment.
This was one of the first housing associations, a philanthropic endeavor that flourished in the second half of the nineteenth century, brought about by the growth of the middle class. Associations included the Peabody Trust, t
Margaret Hilda Thatcher, Baroness Thatcher, was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the longest-serving British prime minister of the 20th century and the first woman to hold that office. A Soviet journalist dubbed her "The'Iron Lady'", a nickname that became associated with her uncompromising politics and leadership style; as Prime Minister, she implemented policies known as Thatcherism. She studied chemistry at Somerville College and worked as a research chemist, before becoming a barrister. Thatcher was elected Member of Parliament for Finchley in 1959. Edward Heath appointed her Secretary of State for Education and Science in his Conservative government. In 1975, Thatcher defeated Heath in the Conservative Party leadership election to become Leader of the Opposition, the first woman to lead a major political party in the United Kingdom, she became Prime Minister after winning the 1979 general election.
Thatcher introduced a series of economic policies intended to reverse high unemployment and Britain's struggles in the wake of the Winter of Discontent and an ongoing recession. Her political philosophy and economic policies emphasised deregulation, flexible labour markets, the privatisation of state-owned companies, reducing the power and influence of trade unions. Thatcher's popularity in her first years in office waned amid recession and rising unemployment, until victory in the 1982 Falklands War and the recovering economy brought a resurgence of support, resulting in her decisive re-election in 1983, she survived an assassination attempt in the Brighton hotel bombing in 1984. Thatcher was re-elected for a third term in 1987, but her subsequent support for the Community Charge was unpopular, her views on the European Community were not shared by others in her Cabinet, she resigned as Prime Minister and party leader in November 1990, after Michael Heseltine launched a challenge to her leadership.
After retiring from the Commons in 1992, she was given a life peerage as Baroness Thatcher which entitled her to sit in the House of Lords. In 2013, she died of a stroke in London at the age of 87. Always a controversial figure, she is nonetheless viewed favourably in historical rankings of British prime ministers, her tenure constituted a realignment towards neoliberal policies in the United Kingdom. Margaret Hilda Roberts was born on 13 October 1925, in Lincolnshire, her parents were Alfred Roberts, from Northamptonshire, Beatrice Ethel, from Lincolnshire. She spent her childhood in Grantham. In 1938, prior to the Second World War, the Roberts family gave sanctuary to a teenage Jewish girl who had escaped Nazi Germany. Margaret, with her pen-friending elder sister Muriel, saved pocket money to help pay for the teenager's journey. Alfred Roberts was an alderman and a Methodist local preacher, brought up his daughter as a strict Wesleyan Methodist, attending the Finkin Street Methodist Church.
He stood as an Independent. He served as Mayor of Grantham in 1945–46 and lost his position as alderman in 1952 after the Labour Party won its first majority on Grantham Council in 1950. Margaret Roberts attended Huntingtower Road Primary School and won a scholarship to Kesteven and Grantham Girls' School, a grammar school, her school reports showed continual improvement. She was head girl in 1942–43. In her upper sixth year she applied for a scholarship to study chemistry at the University of Oxford's Somerville College, a women's college at the time, but she was rejected and was offered a place only after another candidate withdrew. Roberts arrived at Oxford in 1943 and graduated in 1947 with Second-Class Honours, in the four-year Chemistry Bachelor of Science degree, specialising in X-ray crystallography under the supervision of Dorothy Hodgkin, her dissertation was on the structure of the antibiotic gramicidin. Thatcher did not devote herself to studying chemistry as she only intended to be a chemist for a short period of time.
While working on the subject, she was thinking towards law and politics. She was prouder of becoming the first Prime Minister with a science degree than becoming the first woman, as Prime Minister attempted to preserve Somerville as a women's college. During her time at Oxford, she was noted for her isolated and serious attitude, her first boyfriend, Tony Bray, recalled that she was "very thoughtful and a good conversationalist. That's what interested me, she was good at general subjects". Her enthusiasm for politics as a girl made him think of her as "unusual". Bray met Roberts' parents and described them as "slightly austere" and "very proper". At the end of the term at Oxford, Bray became more distant and hoped for their relationship to "fizzle out". Bray recalled that he thought Roberts had taken the relationship more than he had done; when asked about Bray in life, Thatcher prevaricated but acknowledged the circumstances between herself and Bray. Roberts became President of the Oxford University Conservative Association in 1946.
She was influenced at university by political works such as Friedrich Hayek's The Road to Serfdom, which condemned economic intervention by government as a
The Industrial Revolution was the transition to new manufacturing processes in Europe and the US, in the period from about 1760 to sometime between 1820 and 1840. This transition included going from hand production methods to machines, new chemical manufacturing and iron production processes, the increasing use of steam power and water power, the development of machine tools and the rise of the mechanized factory system; the Industrial Revolution led to an unprecedented rise in the rate of population growth. Textiles were the dominant industry of the Industrial Revolution in terms of employment, value of output and capital invested; the textile industry was the first to use modern production methods. The Industrial Revolution began in Great Britain, many of the technological innovations were of British origin. By the mid-18th century Britain was the world's leading commercial nation, controlling a global trading empire with colonies in North America and the Caribbean, with some political influence on the Indian subcontinent, through the activities of the East India Company.
The development of trade and the rise of business were major causes of the Industrial Revolution. The Industrial Revolution marks a major turning point in history. In particular, average income and population began to exhibit unprecedented sustained growth; some economists say that the major impact of the Industrial Revolution was that the standard of living for the general population began to increase for the first time in history, although others have said that it did not begin to meaningfully improve until the late 19th and 20th centuries. GDP per capita was broadly stable before the Industrial Revolution and the emergence of the modern capitalist economy, while the Industrial Revolution began an era of per-capita economic growth in capitalist economies. Economic historians are in agreement that the onset of the Industrial Revolution is the most important event in the history of humanity since the domestication of animals and plants. Although the structural change from agriculture to industry is associated with the Industrial Revolution, in the United Kingdom it was almost complete by 1760.
The precise start and end of the Industrial Revolution is still debated among historians, as is the pace of economic and social changes. Eric Hobsbawm held that the Industrial Revolution began in Britain in the 1780s and was not felt until the 1830s or 1840s, while T. S. Ashton held that it occurred between 1760 and 1830. Rapid industrialization first began in Britain, starting with mechanized spinning in the 1780s, with high rates of growth in steam power and iron production occurring after 1800. Mechanized textile production spread from Great Britain to continental Europe and the United States in the early 19th century, with important centres of textiles and coal emerging in Belgium and the United States and textiles in France. An economic recession occurred from the late 1830s to the early 1840s when the adoption of the original innovations of the Industrial Revolution, such as mechanized spinning and weaving and their markets matured. Innovations developed late in the period, such as the increasing adoption of locomotives and steamships, hot blast iron smelting and new technologies, such as the electrical telegraph introduced in the 1840s and 1850s, were not powerful enough to drive high rates of growth.
Rapid economic growth began to occur after 1870, springing from a new group of innovations in what has been called the Second Industrial Revolution. These new innovations included new steel making processes, mass-production, assembly lines, electrical grid systems, the large-scale manufacture of machine tools and the use of advanced machinery in steam-powered factories; the earliest recorded use of the term "Industrial Revolution" seems to have been in a letter from 6 July 1799 written by French envoy Louis-Guillaume Otto, announcing that France had entered the race to industrialise. In his 1976 book Keywords: A Vocabulary of Culture and Society, Raymond Williams states in the entry for "Industry": "The idea of a new social order based on major industrial change was clear in Southey and Owen, between 1811 and 1818, was implicit as early as Blake in the early 1790s and Wordsworth at the turn of the century." The term Industrial Revolution applied to technological change was becoming more common by the late 1830s, as in Jérôme-Adolphe Blanqui's description in 1837 of la révolution industrielle.
Friedrich Engels in The Condition of the Working Class in England in 1844 spoke of "an industrial revolution, a revolution which at the same time changed the whole of civil society". However, although Engels wrote in the 1840s, his book was not translated into English until the late 1800s, his expression did not enter everyday language until then. Credit for popularising the term may be given to Arnold Toynbee, whose 1881 lectures gave a detailed account of the term; some historians, such as John Clapham and Nicholas Crafts, have argued that the economic and social changes occurred and the term revolution is a misnomer. This is still a subject of debate among some historians; the commencement of the Industrial Revolution is linked to a small number of innovations, beginning in the second half of the 18th century. By the 1830s the following gains had been made in important technologies: Textiles – mechanised cotton spinning powered by steam or water increased the output of a worker by a factor of around 500.
The power loom increased the output of a worker by a factor of over 40. The cotton gin increased productivity of removing seed from cotton by a factor of 50. Large gains in productivity occurred in spinning and weaving of w
The Welsh Government is the devolved government of Wales. It was established by the Government of Wales Act 1998, which created a devolved administration for Wales in line with the result of the 1997 referendum on devolution; the Welsh Government formally separated from the Assembly in 2007 following the passage of the Government of Wales Act 2006. The government consists of ministers, who attend cabinet meetings, deputy ministers who do not, of a counsel general, it is led by the first minister the leader of the largest party in the National Assembly, who selects ministers and deputy ministers with the approval of the assembly. The government is responsible for tabling policy in devolved areas for consideration by the assembly and implementing policy, approved by it; the current Welsh Government is a Labour led administration, following the 2016 National Assembly for Wales election. Mark Drakeford has been the First Minister of Wales since December 2018; as established, the Welsh Government had no independent executive powers in law.
The National Assembly was established as a body corporate by the Government of Wales Act 1998 and the executive, as a committee of the assembly, only had those powers that the assembly as a whole voted to delegate to ministers. The Government of Wales Act 2006 formally separated the National Assembly for Wales and the Welsh Government, giving Welsh ministers independent executive authority, this taking effect after the May 2007 elections. Following separation, the Welsh ministers exercise functions in their own right. Further transfers of executive functions from the British government can be made directly to the Welsh ministers by an Order in Council approved by the British parliament. Separation was designed to clarify the respective roles of the government. Under the structures established by the Government of Wales Act 2006, the role of Welsh ministers is to make decisions; the 60 assembly members in the National Assembly scrutinise policies. The result mirrored much more the relationship between the British government and British parliament and that between the Scottish Government and the Scottish Parliament.
The new arrangements provided for in the Government of Wales Act 2006 created a formal legal separation between the National Assembly for Wales, comprising 60 assembly members, the Welsh Assembly Government, comprising the First Minister, Welsh ministers, deputy ministers and the counsel general. This separation between the two bodies took effect on the appointment of the First Minister by Queen Elizabeth II following the assembly election on 3 May 2007. Separation was meant to clarify the respective roles of the government; the role of the government is to make decisions. The 60 assembly members in the National Assembly scrutinise the Welsh Government's decisions and policies. Assembly measures can now go further than the subordinate legislation which the assembly had the power to make prior to 2007; the assembly's functions, including that of making subordinate legislation, in the main, transferred to the Welsh ministers upon separation. A third body was established under the 2006 Act from May 2007, called the National Assembly for Wales Commission.
It employs the staff supporting the new National Assembly for Wales, holds property, enters into contracts and provides support services on its behalf. The 2006 Act made new provision for the appointment of Welsh ministers; the First Minister is nominated by the Assembly and appointed by Her Majesty the Queen. The First Minister appoints the Welsh Ministers and the Deputy Welsh Ministers, with the approval of Her Majesty; the Act created a new post of Counsel General for Wales, the principal source of legal advice to the Welsh Government. The Counsel General is appointed by the Queen, on the nomination of the First Minister, whose recommendation must be agreed by the National Assembly; the Counsel General may be, but does not have to be, an Assembly Member. The Act permits a maximum of 12 Welsh Ministers, which includes Deputy Welsh Ministers, but excludes the First Minister and the Counsel General. Accordingly, the maximum size of the Welsh Government is 14. Following the "yes" vote in the referendum on further law-making powers for the assembly on 3 March 2011, the Welsh Government is now entitled to propose bills to the National Assembly for Wales on subjects within 20 fields of policy.
Subject to limitations prescribed by the Government of Wales Act 2006, Acts of the National Assembly may make any provision that could be made by Act of Parliament. The 20 areas of responsibility devolved to the National Assembly for Wales are: Agriculture, fisheries and rural development Ancient monuments and historical buildings Culture Economic development Education and training Environment Fire and rescue services and promotion of fire safety Food Health and health services Highways and transport Housing Local government National Assembly for Wales Public administration Social welfare Sport and rec
Renting known as hiring or letting, is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges incurred by the ownership. An example of renting is equipment rental. Renting can be an example of the sharing economy. There are many possible reasons for renting instead of buying, for example: In many jurisdictions rent paid in a trade or business is tax deductible, whereas rent on a dwelling is not tax deductible in most jurisdictions. Financial inadequacy, such as renting a house when one is unable to purchase, i.e "renting by necessity". Reducing financial risk due to depreciation and transaction costs for real estate which might be needed only for a short amount of time; when something is needed only temporarily, as in the case of a special tool, a truck or a skip. When something is needed that may or may not be owned but is not in proximity for use, such as renting an automobile or bicycle when away on a trip.
Needing a cheaper alternative to buying, such as renting a movie: a person is unwilling to pay the full price for a movie, so they rent it for a lesser price, but give up the chance to view it again later. The tenant may want to leave the burden of upkeep of the property to his agents. There is no need to worry about maintenance. Renting keeps off-balance-sheet the debt that would burden the balance sheet of a company in case the property would have been bought. Renting is good for the environment if products are used more efficiently by maximizing utility rather than being disposed and under utilized. Short-term rental of all sorts of products represents an estimated €108 billion annual market in Europe and is expected to grow further as the internet makes it easier to find specific items available for rent. According to a poll by YouGov, 76% of people looking to rent would go to the internet first to find what they need, it has been reported that the financial crisis of 2007–2010 may have contributed to the rapid growth of online rental marketplaces, such as erento, as consumers are more to consider renting instead of buying in times of financial hardship.
Environmental concerns, fast depreciation of goods, a more transient workforce mean that consumers are searching for rentals online. A 2010 US survey found. Net income received, or losses suffered, by an investor from renting of one or two properties is subject to idiosyncratic risk due to the numerous things that can happen to real property and variable behavior of tenants. There is an implied, explicit, or written rental agreement or contract involved to specify the terms of the rental, which are regulated and managed under contract law. Examples include letting out real estate for the purpose of housing tenure, parking space for a vehicle, storage space, whole or portions of properties for business, institutional, or government use, or other reasons; when renting real estate, the person or party who lives in or occupies the real estate is called a tenant, paying rent to the owner of the property called a landlord. The real estate rented may be all or part of any real estate, such as an apartment, building, business office or suite, farm, or an inside or outside space to park a vehicle, or store things all under Real estate law.
The tenancy agreement for real estate is called a lease, involves specific property rights in real property, as opposed to chattels. In India, the rental income on property is taxed under the head "income from house property". A deduction of 30% is allowed from total rent, charged to tax; the time use of a chattel or other so called "personal property" is covered under general contract law, but the term lease nowadays extends to long term rental contracts of more expensive non-Real properties such as automobiles, planes, office equipment and so forth. The distinction in that case is long term versus short term rentals; some non-real properties available for rent or lease are: motion pictures on VHS or DVD, of audio CDs, of computer programs on CD-ROM. Transport equipment, such as an automobile or a bicycle. Ships and boats, in which case rental is known as chartering, the rent is known as hire or freight aircraft, in which case rental is known as chartering, or leasing if the rental is longer term specialized tools, such as a chainsaw, laptop, IT equipment or something more substantial, such as a forklift.
Large equipment such as cranes, oil rigs and submarines. A deckchair or beach chair and umbrella. Furniture items such as Wooden Cot, iron cot, coffee Table, dining table, Mattress. Designer handbags, jewelry and watches. Home Appliances items such as washing machines, Television, Microwave oven, Air-Conditioners In various degrees, renting can involve buying services for various amounts of time, such as staying in a hotel, using a computer in an Internet cafe, or riding in a taxicab; as seen from the examples, some rented goods are used on the spot, but they are taken along.
Financial crisis of 2007–2008
The financial crisis of 2007–2008 known as the global financial crisis and the 2008 financial crisis, is considered by many economists to have been the most serious financial crisis since the Great Depression of the 1930s. It began in 2007 with a crisis in the subprime mortgage market in the United States, developed into a full-blown international banking crisis with the collapse of the investment bank Lehman Brothers on September 15, 2008. Excessive risk-taking by banks such as Lehman Brothers helped to magnify the financial impact globally. Massive bail-outs of financial institutions and other palliative monetary and fiscal policies were employed to prevent a possible collapse of the world financial system; the crisis was nonetheless followed by the Great Recession. The European debt crisis, a crisis in the banking system of the European countries using the euro, followed later. In 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act was enacted in the US following the crisis to "promote the financial stability of the United States".
The Basel III capital and liquidity standards were adopted by countries around the world. Following is a timeline of major events during the financial crisis: February 20, 2007: The Dow Jones Industrial Average hit its peak level of 12,786. Existing home sales peaked this month and began to decline. April 2007: New Century, an American REIT specializing in sub-prime mortgages, filed for Chapter 11 bankruptcy protection; this propagated the sub-prime crisis, to banks around the world. August 9, 2007: BNP Paribas, a French investment bank, blocked withdrawals from two of its hedge funds – a clear sign that banks were refusing to do business with each other. August 2007: The Federal Open Market Committee began reducing the federal funds rate from its peak of 5.25% in response to worries about liquidity and confidence. December 12, 2007: The Federal Reserve instituted the Term Auction Facility to supply short-term credit to banks with sub-prime mortgages. February 13, 2008: The Economic Stimulus Act of 2008 was enacted, which included a tax rebate.
March 17, 2008: The Federal Reserve guaranteed Bear Stearns' bad loans to facilitate its acquisition by JPMorgan Chase. July 11, 2008: IndyMac failed. July 30, 2008: The Housing and Economic Recovery Act of 2008 was enacted. September 7, 2008: Fannie Mae and Freddie Mac were taken over by the federal government. September 15, 2008: Lehman Brothers went bankrupt after the Federal Reserve declined to guarantee its loans, causing the Dow Jones to drop 504 points, its worst decline in seven years; the same day, Bank of America purchased Merrill Lynch. September 16, 2008: The Federal Reserve took over American International Group; the Reserve Primary Fund "broke the buck" as a result of massive withdrawals from money market accounts. September 21, 2008: Goldman Sachs and Morgan Stanley converted themselves from investment banks to bank holding companies to increase their protection by the Federal Reserve. September 26, 2008: Washington Mutual went bankrupt after a bank run. September 29, 2008: The House of Representatives rejected the Emergency Economic Stabilization Act of 2008 instituting the $700 billion Troubled Asset Relief Program.
In response the Dow Jones dropped its largest single-day decline. October 3, 2008: Congress passed the Emergency Economic Stabilization Act of 2008. November 25, 2008: The Term Asset-Backed Securities Loan Facility was announced. December 16, 2008: The federal funds rate was lowered to zero percent. January 2009: The Big Three automobile manufacturers received a bailout from the TARP program. February 13, 2009: Congress approved the American Recovery and Reinvestment Act of 2009, a $787 billion economic stimulus package. March 6, 2009: The Dow Jones hit its lowest level of 6,443.27. The precipitating factor for the Financial Crisis of 2007–2008 was a high default rate in the United States subprime home mortgage sector – the bursting of the "subprime bubble." While the causes of the bubble are disputed, some or all of the following factors must have contributed. Low interest rates encouraged mortgage lending. Securitization. Many mortgages were bundled together and formed into new financial instruments called mortgage-backed securities, in a process known as securitization.
These bundles could be sold as low-risk securities because they were backed by credit default swaps insurance. Because mortgage lenders could pass these mortgages on in this way, they could and did adopt loose underwriting criteria. Lax regulation allowed predatory lending in the private sector after the federal government overrode anti-predatory state laws in 2004; the Community Reinvestment Act, a 1977 US federal law designed to help low- and moderate-income Americans get mortgage loans encouraged banks to grant mortgages to higher risk families. Reckless lending by, for example, Bank of America's Countrywide Financial unit, caused Fannie Mae and Freddie Mac to lose market share and to respond by lowering their own standards. Mortgage guarantees. Many of the subprime loans were bundled and sold accruing to the quasi-government agencies Fannie Mae and Freddie Mac; the implicit guarantee by the US federal government created a moral hazard and contributed to a glut of risky lending. The accumulation and subsequent high default rate of these subprime mortgages led to the financial crisis and the consequent damage to the world economy.
High mortgage approval rates led to a large pool of homebuyers. This appreciation in value led large numbers of homeowners to borrow against their homes as an apparent windfall; this "bubble" would be burst by a r