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The year's dramatic events made fools of some of the financial world's biggest names. Fortunes have been lost and firms laid low as a series of deals - some of which now look like little more than bets - have gone bitterly sour.
Top of the list of deals that went spectacularly wrong was the RBS takeover of ABN Amro. The £47bn deal, which saw RBS and its partners Santander and Fortis gatecrash a rival takeover by Barclays, was completed late in 2007 but its effects have been felt this year. Europe's largest-ever cross-border deal was secured at the very top of the investment boom and is the financial world's equivalent of the merger of AOL and Time Warner, which marked the height of dotcom stupidity. Despite management's assertions that it would strengthen RBS's position, the deal weakened the bank's balance sheet just as the market began to panic about the strength of the sector. It has since forced the 281-year-old RBS to call on the UK taxpayer for a bail-out. Its partner Fortis, which picked up ABN Amro's Dutch retail banking, had to be bailed out by the governments of the Netherlands, Belgium and Luxembourg.
Santander, meanwhile, has seen its shares halve since June but has been a net beneficiary of the UK's bank crisis as it has also picked up Bradford & Bingley and Alliance & Leicester. Shareholders in the latter are ruing the fact that A&L's board never gave them a chance to sell out early in the year at about £6 a share, instead of taking the all-share deal at the equivalent of 299p in the summer. The hubristic architect of the disaster, RBS boss Fred "The Shred" Goodwin, was pushed out as part of the government's rescue. And the pain has not ended. The City widely expects RBS to start the new year with a huge profits warning, not least because it seems to have lost £400m on investments made with Bernard Madoff, the American investment adviser whose money-management firm collapsed just before Christmas and who is under investigation for fraud.
The banking crisis has made fools of several high-profile financiers. Joe Lewis, the Hackney-born currency speculator now based in the Caribbean, lost a packet betting that Bear Stearns would recover after falling foul of the collapsing sub-prime mortgage market. He started picking up shares in the bank in summer 2007 at about $100 a share, thinking the institution was seriously undervalued by Wall Street. The bank was sold to its rival JP Morgan this year for $10 a share, leaving Lewis nursing losses of $1.2bn (£604m).
Lewis, however, was back a few months later, taking advantage of the cash squeeze being felt by another well known City figure, the property tycoon Robert Tchenguiz, from the Icelandic banking crisis. In the autumn, the recall of loans from crisis-hit Icelandic bank Kaupthing forced Tchenguiz to sell big stakes in J Sainsbury and Mitchells & Butlers, Britain's largest pub operator. His losses have been estimated at more than £800m. Lewis is believed to have talked to Ernst & Young, the administrator of Kaupthing, about buying the Sainsbury's stake, but it was dribbled into the market. Lewis did, however, snap up a chunk of M&B.
Another vote of confidence in a once great financial institution has left the Saudi prince Al-Waleed Bin Talal with big losses. Al-Waleed, the first private buyer of an A380 superjumbo, pumped $350m into Citigroup last month, amid fears that what was once the world's biggest bank did not have the firepower to survive to 2009. It was his stake in the bank's predecessor - Citicorp - in the early 1990s that helped him consolidate his fortune and led Time magazine to brand him the Warren Buffett of the Gulf. But Citigroup's stock is still sliding. He is also a big investor in Songbird, the property company that owns Canary Wharf, and has seen that share price also plunge as the credit crunch has hit tenants such as Lehman Brothers.
Citigroup's slide has left Singapore's state investment company Temasek also nursing large losses. The prime minister, Lee Hsien Loong, was forced to publicly defend the performance of Temasek and the Government of Singapore Investment Corp (GIC) - the other state-owned investment firm. The two have pumped more than $23bn into banks including Citigroup, UBS, Merrill Lynch and Barclays
The decline in Barclays' share price has also troubled China Development Bank, which spent £1.5bn buying a small stake at 720p a share - they are now at 145p. Other terrible investments include the acquisition of a 12% stake in Rio Tinto by Alcoa and the Chinese aluminium firm Chinalco at £60 a share back in February. The global recession have seen commodity prices crash and the stock is now at £13.75.
Woolworths' collapse has delivered a very unwelcome Christmas gift for Ardeshir Naghshineh. The Iranian-born property tycoon owned 10% of the company. Naghshineh, best known as the owner of the Centre Point tower in central London, may now wish he had not been so firmly against a £50m bid in August from a consortium led by Malcolm Walker, chief executive of the frozen food retailer Iceland.
Finally, December produced a bumper crop of red faces as one of Wall Street's most respected dealers - and a former chairman of the Nasdaq exchange - was charged with running what financial regulators called a "stunning fraud" of "epic proportions". If the estimate of $50bn losses is correct, Bernard Madoff's alleged fraud would be four times larger than the fraud that brought down WorldCom and one of the most incredible instances of a pyramid investment scheme ever seen. It has already hit major institutions including HSBC, RBS and Santander as well as Nicola Horlick, one of the City's best known figures. As well as thousands of individual investors - including Arpad Busson, who is engaged to the actor Uma Thurman - and charities such as Steven Spielberg's Wunderkinder Foundation.
Bear Stearns
The speculator Joe Lewis began buying at about $100 a share. The bank was later sold to JP Morgan at $10 a share, leaving Lewis nursing a $1.2bn loss
Barclays
China Development Bank spent £1.5bn on a stake in the British bank at 720p a share. The stock is now at 145p.
Rio Tinto
Chinalco and Alcoa bought into the mining group at £60. It is now £13.75.
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