Largest bank bail-out

The great financial crisis that began in 2007 had, at its heart, a failure of the banking system. Bank failures are a fairly regular and normal part of economic life: at least one US bank failed every year between 1934 and 2005. In the 1980s, the US Federal Government had to bail out hundreds of Savings and Loans institutions for over $160 billion. But what made this crisis different was its sheer scale. Governments had to intervene, and on a completely unprecedented scale. The US government-sponsored "Fannie Mae" (the Federal National Mortgage Association) and "Freddie Mac" (the Federal Home Loan Mortgage Corporation) buckled during the crisis of the US housing market that broke out late in 2007, and had to be nationalised and refinanced. In 2008, the US Treasury placed a ceiling of $100 bn on each bail-out: a limit that was removed in December 2009 as the full scale of the crisis became apparent. By late 2012, $187.5 bn had been provided to these stricken mortgage giants. The Federal Housing Finance Agency estimates that the final bill may be as high as $360 bn!