A Quote by Christine Lagarde
If Lehman Brothers had been a bit more Lehman Sisters ... we would not have had the degree of tragedy that we had as a result of what happened.
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I often say to entrepreneurs, 'If Lehman Brothers were Lehman Brothers & Sisters, it wouldn't have gone into bankruptcy.'
When I left my job at Lehman Brothers to start a company, my best friend's mother said, 'How could you leave a sure thing like Lehman to do a silly carpool startup?' That was three months before Lehman went bankrupt.
I mean there is no capital requirements to it or anything of the sort. And basically, I said there were possibly financial weapons of mass destruction, and they had them. They destroyed AIG. They certainly contributed to the destruction of Bear Sterns and Lehman. Although Lehman had other problems, too.
No one suggested Lehman deserved to be saved. But the argument has been made that the crisis might have been less severe if it had been saved, because Lehman's failure created remarkable uncertainty in the market as investors became confused about the role of the government and whether it was picking winners and losers.
In truth, in the fairy-tale version of bailing out Lehman, the next domino, A.I.G., would have fallen even harder. If the politics of bailing out Lehman were bad, the politics of bailing out A.I.G. would have been worse. And the systemic risk that a failure of A.I.G. posed was orders of magnitude greater than Lehman's collapse.
The blowback against a bailout of Lehman would have been fierce. It is often forgotten, but the prevailing wisdom the day after Lehman fell was that its collapse was a good thing.
The assumption that Washington could and would resolve Lehman Brothers without a bankruptcy, as it had Bear Stearns, was the single biggest mistake in the series of mistakes in 2007 and 2008 that led to the financial panic and the ensuing epidemic of job losses.
He was about to go home, about to return to the place where he had had a family. It was in Godric’s Hollow that, but for Voldemort, he would have grown up and spent every school holiday. He could have invited friends to his house. . . . He might even have had brothers and sisters. . . . It would have been his mother who had made his seventeenth birthday cake. The life he had lost had hardly ever seemed so real to him as at this moment, when he knew he was about to see the place where it had been taken from him.
A Fed loan to Lehman Brothers would not have prevented a bankruptcy.
Grandmother pointed out my brother Perry, my sister Sarah, and my sister Eliza, who stood in the group. I had never seen my brother nor my sisters before; and, though I had sometimes heard of them, and felt a curious interest in them, I really did not understand what they were to me, or I to them. We were brothers and sisters, but what of that? Why should they be attached to me, or I to them? Brothers and sisters were by blood; but slavery had made us strangers. I heard the words brother and sisters, and knew they must mean something; but slavery had robbed these terms of their true meaning.
American business would be run better today if there was more alignment between CEOs' interest and the company. For example, would the financial crisis of 2008 have occurred if the CEO of Lehman and Morgan Stanley and Goldman and Citibank had to take a very small percentage of every mortgage-backed security... or every loan they made?
This crisis has the potential to be a lot worse than Lehman Brothers.
The failure of Lehman Brothers demonstrated that liquidity provision by the Federal Reserve would not be sufficient to stop the crisis; substantial fiscal resources were necessary.
The subprime disaster was a result of financial bombs - derivatives - exploding in financial institutions such as AIG and Lehman Brothers, as well as banks and financial institutions throughout the world.
In our equities business, 49 of the 50 most important Lehman clients are back doing business with us. The flows are 75 to 80 per cent of what they were prior to the bankruptcy. The issues which damaged Lehman were around commercial mortgages and illiquid private equity assets.
It would have been very much better for the world if Britain had remained neutral and the Germans had won a quick victory. We should not have had either the Nazis or the Communists if that had happened.
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