WITH a single bankruptcy application on Sept 15, 2008, Lehman Brothers set off a global financial crisis.
Lehman was not the first bank to collapse that year - Bear Stearns had to be rescued by JP Morgan six months earlier. Neither was Lehman the first sign of trouble in the financial markets - the US subprime crisis had already been brewing for about a year.
But Lehman was the big one that the US government could not or would not save, and once Lehman fell, all bets were off.
Market reaction was an immediate, loud and unambiguous scream. The Dow Jones Industrial Average fell more than 2 per cent within the first half-hour of trading. The Singapore Straits Times Index shed 3.3 per cent, while the FTSE 100 in London lost 4 per cent.
Capital markets dried up. Retail investors who had bought Lehman's structured products were left with worthless pieces of paper; banks wrote off billions of dollars of assets; central banks pulled out all stops; and governments opened their vaults to try to stave off the worst.
Jobs were lost as well. In Singapore, DBS Bank cut 900 jobs in its biggest ever retrenchment after reporting its worst quarterly performance since the end of 2005.
The impact of the global financial crisis continues to be felt today. Global economic growth remains lacklustre with developed economies still struggling with the structural issues exposed by the crisis. Major central banks have yet to normalise policy, interest rates remain depressed, the financial industry is significantly more regulated and Wall Street has lost its shine.
The global financial crisis may have been the big news, but it was not the only news in 2008. At the start of the year, Singapore announced a major increase in spending on the rail network, with a S$20 million commitment and plans for two additional lines.
The Business Times has been there to report and analyse the most significant news since 1976. Every week, this feature will showcase excerpts from the biggest stories for each year that the paper has been in operation. The full text of all the stories can be found online at bt.sg/bt_40