The global financial crisis, health and health care.

From the early outward signs of a collapse in the US sub-prime mortgage market in the spring of 2007, the global banking crisis unfolded. Financial institutions thought too big to fail, failed. In the summer of 2007 the French bank BNP Paribas ceased activity in three hedge funds that specialized in USmortgage debt.Meanwhile, in Britain, on 14th September investors in the bank, Northern Rock, withdrew over £1 billion in the biggest run on a bank in the United Kingdom for more than a century. The bank was nationalized in February of 2008 after two private bids to take it over failed. In the autumn of 2007 more and more banks started to announce losses. Across the Atlantic, in the spring of 2008 the US investment bank Bear Sterns was merged with JP Morgan Chase as part of the Federal Reserve Bank’s rescue package. By the autumn of 2008 the seizure in bank lending and the scale of the financial problem started to accelerate with the decision of the US government not to support Lehman Brothers investment bank. On 15th September, Lehman’s filed for bankruptcy. At the April meeting of the G20 group of countries in 2009 a commitment was made to co-ordinate further financial support for the banking industry globally as well as fiscal stimulus through quantitative easing and other measures to try and dampen recessions in many countries. By 2009, the cost of the financial support to banks and the world economy in general reached a total of around £7.1 trillion, a fifth of the total annual global economy (Daily Telegraph, 2009). In the United Kingdom, the cost of support by the government was estimated at around £1.23 trillion – over 80%of the country’s annual gross domestic product (GDP). Interest rates were cut severely – UK central bank interest rates hit their lowest level since 1694 at just 0.5% (Bank of England, 2009).