Big arrow: Lehman’s bankruptcy filing.
Small arrow: Bear Stearns “crisis”
data source: Financial System Review, december 2008, bank of canada, page 14
Related:
Three days that shook the world
- DTCC Posts 6-Month Market Activity Snapshot on CDS Market
- Default in Today’s Advanced Economies: Unnecessary, Undesirable, and Unlikely
- The Impact of Banks’ Cumulative Reserve Position on Federal Funds Rate Behavior
- A Wolf in Sheep’s Clothing
- TBA Trading and Liquidity in the Agency MBS Market
- Impact of High and Growing Government Debt on Economic Growth
- Financial Amplification of Foreign Exchange Risk Premia
- The Central-Bank Balance Sheet as an Instrument of Monetary Policy
- Exorbitant Privilege and Exorbitant Duty
- The Information Value of the Stress Test and Bank Opacity
- Price of Risk—Recent Evidence from Large Financials
- Shadow Banking
- Summer Doldrums
- Credit Default Swaps: What Are the Social Benefits and Costs?
- The International Role of the Euro
- Chronicle of Currency Collapses: Re-Examining the Effects on Output
- The Paradox of Toil
- Links
- What the Fed Did and Why
- Markets and Government Before, During and After the 2007-20xx Crisis
- Detecting and Interpreting Financial Stress in the Euro Area
- Are We Building the Foundations for the Next Crisis Already? The Case of Central Clearing
- Links
- Links
- OIS Discounting
- Multimarket Trading and the Cost of Debt: Evidence from Global Bonds
- Is Economics Coursework, or Majoring in Economics, Associated with Different Civic Behaviors?
- China’s High Saving Rate: Myth and Reality
- Oil Spill
- Eurozone €440 Bln SPV Aid Fund
- ECB Financial Accounts and ECB Financial Strength
- Central Bank Swap Networks
- DTCC Posts CDS Market Activity Snapshot
- ECB: Financial Stability Review (June 2010)
- Global CDO Issuance by Transaction Structure
- Links
- TBAC Minutes: Sovereign CDS and Swap Spreads
- Goldman Sachs Underwriting Market Shares in Subprime RMBS and CDOs
- Abacus for Dummies
- The World’s Safest and Riskiest Sovereign Debt (Update)
- Increased Sovereign Risk Behind Negative Swap Spreads
- Haircuts
- Markets, Religion, Community Size, and the Evolution of Fairness and Punishment
- Beyond the Dollar: Rethinking the International Monetary System
- Links
- Amazing Discovery
- ABCP Outstanding: Still Crashing
- Greek Government Bond Market
- Links
- Sterling Today
Apparently Sunday trading sessions are not enough:
“That’s why Mr. Miller says it was crucial for the government to head off the wholesale termination by counterparties of all their transactions with Lehman before the firm was forced into bankruptcy. “If the Fed or the Treasury said, ‘Let’s say to Lehman, there’s no bailout, we’re not going to save the company,’ they could have supported an orderly unwinding of all the transactions over a period of months,” he says. “It probably would’ve cost the economy a lot less money.”
-Lehman’s undertaker
http://www.nytimes.com/2008/12/14/business/14miller.html?_r=1&ref=business&pagewanted=all
Oh, and Dick Fuld is rumored to be looking to get into advisory, once his contract with Lehman is up at the end of the year.
well, they allowed it to fail because they thought markets would remain orderly, talking about misreading the consequences…
as mentioned in the post “Official: the Fed is clueless” :
The Fed board members assured Griffin (citadel) that the markets would remain orderly as Lehman unwound its positions.
So Lehman was too big to be allowed to fail, but they allowed it to fail anyway?