When Michael Geoghegan was first told that some of HSBC's poorer American mortgage borrowers were facing serious repayment difficulties, he had no idea of the carnage that would follow.

The group chief executive of one of the world's biggest banking groups was among the first to give warning that a credit crisis was looming in the sub-prime market. It was clear that HSBC was going to be a casualty.

Just how much it would suffer was signalled in February 2007, when Mr Geoghegan issued the first profit warning in the 142-year history of the bank.

He admitted that HSBC would write off more than $10.5 billion as a result of its disastrous foray into sub-prime lending, carried out through Household, the specialist US lender that it bought for $14.5 billion in 2003.

Bobby Mehta, HSBC's chief executive of North America, and Sandy Derickson, Mr Mehta's first lieutenant, who ran the HSBC Bank in the United States, fell on their swords shortly afterwards. By then, it was obvious that the bank was going to lose more than simply money.

Moreover, by the time of HSBC's interim results six months later, when the bank was confessing to billions more in writedowns against sour sub-prime loans, it was only one of numerous financial services companies staring over a precipice.

Beneath them, all financial hell had broken loose. Two of Bear Stearns's hedge funds had collapsed under the weight of their sub-prime exposure and the Wall Street securities firm had to tell investors that their holdings were virtually worthless.

Standard & Poor's, the credit rating agency, gave warning that it might have to slash its ratings on $12 billion of sub-prime debt.

Ben Bernanke, the chairman of the US Federal Reserve, predicted that $400 billion of toxic securities would have to be cleared through the world's credit markets amid predictions that the international financial system was in crisis and that a global recession was looming.

This week marks the tumultuous first anniversary of the period, immortalised on August 9, 2007, when the true horror of the credit crisis hit home.

That was the day that the European Central Bank (ECB) injected an unprecedented €94.8 billion into the money markets in a desperate effort to free up lending.

The record sum was more than the American central bank had pumped into the system in the days that followed the terrorist outrages of September 11, 2001.

It was described by Adam Applegarth, then the chief executive of Northern Rock, the mortgage bank that was brought to its knees by the crisis, as “the day the world changed”.

Northern Rock was denied funding by the wholesale markets after it over-extended itself on mortgage loans. Even the ECB's generosity was not enough to save the bank, which was forced to seek emergency funding from the Bank of England in September and eventually was nationalised in February.

Since last August half a dozen once-mighty bank chief executives have bitten the dust, including Charles “Chuck” Prince, at Citigroup, Stanley O'Neal, at Merrill Lynch, and Ken Thompson, at Wachovia.

Several former financial titans have met their demise, not least Bear Stearns, which was bought by JPMorgan Chase in a rescue engineered by the Fed.

The world's banks, from Wall Street to the City and Canary Wharf, have already written off the $400 billion highlighted by Mr Bernanke as likely to be worthless.

Now, the worry - most notably expressed by John Paulson, the hedge fund manager who has made an estimated $3 billion by betting against sub-prime - is that a further $900 billion of bad debts will have to be written off before the crisis comes to an end.

The first anniversary of the start of the affair is a date that will not be lost on HSBC, which is one of three UK-based banks due to report half-year results this week. Analysts reckon that the first-half profits of HSBC will slide by as much as 37 per cent to only $8.95 billion (£4.5 billion).

Royal Bank of Scotland is predicted to have racked up losses of as much as £1.7 billion, in what would be the biggest loss in British banking history. Barclays is forecast to report a 32 per cent slide in first-half pre-tax profits to £2.8 billion, by Citigroup analysts.

Mr Geoghegan has survived several assaults on his leadership, not least by Knight Vinke, the activist investor. Others, such as Marcel Ospel and Peter Wuffli, respectively the past chairman and past chief executive of UBS, the Swiss bank, have met grizzlier fates.

In the squeeze

1,039.2 points that the FTSE 100 has fallen since August 9, 2007

£469 billion value wiped off UK blue-chip companies as a result

2,331.99 points the Dow Jones industrial average has fallen in the period

$72.85 price of a barrel of oil on August 9

$125 oil price on Friday

34.8 per cent increase in the price of gold since investors began to chase safe-haven investments against the credit crunch

£14,582 fall in the average UK house price in the past 12 months, according to Nationwide

$397 billion Writedowns by the world's banks on sub-prime mortgage exposure

6 number of chief executives of UK and US banks who have resigned since the credit crunch began

$2.0370 Sterling's value against the dollar on August 9

Source: Times research

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