The final hours of Lehman: Debate continues

So what really went down when Lehman Brothers (Lehman Brothers news) failed?

There's been a lot of debate about that recently as the FCIC weighed in with some interesting hearings, which portrayed Lehman Brothers CEO Dick Fuld in a sympathetic light.

The New York Times weighs in with a column that suggests the truth may be somewhere in between the polar extremes, that the bank was allowed to fail because regulators chose not to save it and that regulators did not have the legal authority to save it.

It's true that once the Fed determined Lehman did not have enough collateral to pay back loans, "the Fed was legally prevented from making the loan," notes the Times.

But the events transpired in a highly charged political environment, as evidenced by new emails from regulators at the time. Several made it clear that the political will to spend Uncle Sam's money to save Lehman just wasn't there, even though it apparently was for Bear Stearns and AIG.

Perhaps we'll never know what really happened.

For more:
- here's the article

Related Articles:
FCIC treats Richard Fuld sympathetically
Lehman Brothers charges still coming? Erin Callan spared
Dick Fuld still aims to start advisory boutique
Lehman Brothers' Hudson Castle helped mask problems

Post a comment