Lehman Jan 4

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Comment - Bernanke

1. Bernanke’s Courage Holds Lessons For Policymakers

   Jan 3, 2016 | Business Spectator

   By Peter Cai
   
   
   ...One of the most controversial decisions during his chairmanship was the failure of Lehman Brothers, which has been widely regarded as the turning point in the crisis. Bernanke said the whole rescue plan was dependent on finding a buyer for Lehman and, in the end, there was no suitor...

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Comment - Bernanke

1. Bernanke’s Courage Holds Lessons For Policymakers

   Jan 3, 2016 | Business Spectator

   By Peter Cai

   Many books have been written about the global financial crisis of 2008, including works by key players such as Hank Paulson, the then US treasury secretary, and Tim Geithner, the then president of the Federal Reserve of New York and Paulson’s successor at the Treasury.

   The latest addition is arguably the most important one: a reflection on the crisis by Ben Bernanke, the former chairman of the US Federal Reserve, who played an instrumental role in arresting the US subprime crisis from morphing into a 1930s-style Great Depression.

   ...One of the most controversial decisions during his chairmanship was the failure of Lehman Brothers, which has been widely regarded as the turning point in the crisis. Bernanke said the whole rescue plan was dependent on finding a buyer for Lehman and, in the end, there was no suitor.

   He had this to say in his defence: “Without a buyer, and with no authority to inject fresh capital or guarantee Lehman’s assets, we had no means of saving the firm.” On other hand, Paulson, a more savvy political player, sensing which way the political wind was blowing, made clear there would be no government money available for the Lehman deal.

   Historians will debate for years to come whether the Federal Reserve and the Treasury could have done more to save Lehman Brothers.

   In his book, Bernanke also vents his frustration at American politicians and the state of political paralysis in Washington. He argued forcefully that many played an obstructionist role during the financial crisis...

   For full story: http://www.businessspectator.com.au/article/2016/1/4/economy/bernankes-courage-holds-lessons-policymakers
   

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