Lehman and Federal Reserve Assets

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

Posted by jck on December 14th, 2008 at 10:15 am    3 Comments

3 Responses to “ Lehman and Federal Reserve Assets ”

  • # 1 Ovid Benelli Says:

    So Lehman was too big to be allowed to fail, but they allowed it to fail anyway?

  • # 2 jck Says:

    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.

  • # 3 Amicus Says:

    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.

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