Ten Years After the Credit Crunch

Ten years ago, the worst financial crisis of the post-war era broke out following the collapse of a housing bubble in the US that led to a crunch in the American subprime mortgage market in 2007. With the bankruptcy of the Lehman Brothers investment bank in September 2008, the crisis had reached its preliminary climax. Meanwhile, the crisis has enveloped several banks across the world resulting in them going into insolvency or being bailed out by governments.

How did all this affect the UK? A decade later, The Week mapped the crisis by the numbers and this is what our graphic shows: £137 billion was the cost for bailing out the UK banking sector and £115 billion the fine which global banking groups paid out in the US. Compared to 2006, banks in the UK have added up their tier 1 capital from 4.3 to 14.8 percent. That means, they have increased “the cash held back to shore up the balance sheet in the event of a downturn that causes loan defaults”, according to The Week. Last but not least, London house prices have been surging over the past ten years: As property company Savills found, prices grew 78 percent and now lie at £478,142 on average for London compared with the UK average of £209,971.