Just over a year since the credit crunch began, this Money Box special looked at how the global slowdown has affected our financial institutions and our personal finances and asked will things ever be the same again?
The crisis started in the sub-prime mortgage market in the US.
Tens of thousands of people had been lent money they could not pay back, to buy homes they could not afford.
Banks around the globe wrote off billions of pounds from their exposure to these mortgage backed securities.
As fear and rumour spread in the markets, banks became unwilling to lend to each other, resulting in the seizure of the wholesale market that many banks and building societies had come to rely on to fund their lending.
The consequence was a rapid contraction of mortgage deals on offer.
The gloom has now spread to the wider economy.
Inflation is at a 16-year high - driven by rising energy and food prices - and unemployment is also on the increase.
But there have been some pockets of good news.
With banks eager to bring in more money from depositors, savings rates have been steadily rising.
So what went wrong and how long will the squeeze go on for?
And what does it mean for your personal finances?
Paul Lewis was joined by:
- George Magnus, senior economic advisor at the Swiss investment bank UBS
- Sir George Cox, former bank director and business leader
- Vince Cable MP, Liberal Democrat Treasury spokesman
- Melanie Bien, a director at Savills Private Finance
- James Brooke, financial planner, Anand Associates
We also heard from Jan Brockmeijer, deputy director, Monetary and Capital Markets, at the International Monetary Fund and Stephen Noakes from Cheltenham & Gloucester.
BBC Radio 4's Money Box Special was broadcast on Saturday, 23 August 2007 at 1204 BST.
A longer version of the programme was broadcast on Monday 25 August at 1502 BST.