The Fed and Lehman Brothers : setting the record straight on a financial disaster / Laurence M. Ball (Johns Hopkins University).
Title:
The Fed and Lehman Brothers : setting the record straight on a financial disaster / Laurence M. Ball (Johns Hopkins University).
ISBN:
9781108420969
Personal Author:
Publication Information:
Cambridge, United Kingdom ; New York, NY : Cambridge University Press, 2018.
©2018
Physical Description:
xxv, 267 pages : illustrations ; 24 cm.
Contents:
Machine generated contents note: 1. Introduction -- A Preview of the Argument -- Sources of Evidence -- 2. Crisis of 2008 -- Investment Banking on the Eve of the Crisis -- Bear Stearns Crisis and the Fed's Response, March 2008 -- Lehman Brothers Crisis, March-September 2008 -- Lehman's Final Weekend -- After Lehman's Bankruptcy -- 3. Legal Criteria for Fed Assistance -- Section 13(3) of the Federal Reserve Act -- What Is "Satisfactory Security!" -- 4. Lehman's Balance Sheet and Solvency -- An Overview of Lehman Brothers Holdings Inc. -- LBHI's Balance Sheet -- Asset Valuation and Lehman's Solvency -- Fed Officials' Claims about Lehman's Solvency -- Lehman in Bankruptcy -- 5. Lehman's Liquidity Crisis -- Lehman's Strategy for Liquidity Management -- Changes in Lehman's Liquidity, May 31 -- September 9 -- Run on Lehman, September 10 -- 12 -- Lehman's Predicament on September 13 -- 14 -- 6. Lehman's Collateral and the Feasibility of Liquidity Support -- Implications of Lehman's Long-Term Debt -- A Realistic Scenario for Fed Assistance -- Comparison to Actual Assistance to LBI -- 7. Fed Discussions of Collateral and Liquidity Support -- Discussions before September 15 -- Bernanke's Testimony on September 23 -- Fed Claims about Legal Authority, October 2008 -- Present -- FCIC Challenges Fed Officials -- Did Lehman Need a "Naked Guarantee!" -- 8. Fed Actions That Ensured Lehman's Bankruptcy -- An Overview of the Fed's Actions -- Fed Tells Lehman to File for Bankruptcy -- Confusion about the PDCF Restrictions -- No Support for LBIE -- Friday Criterion -- 9. Possible Long-Term Outcomes for Lehman -- Possible Outcome #1 Completing the Barclays Deal -- Possible Outcome #2 Survival of an Independent Lehman -- Possible Outcome #3 An Orderly Wind Down -- 10. How Risky Were the Fed's Rescues of Other Firms? -- Liquidity Support for Morgan Stanley and Goldman Sachs -- Bear Stearns Rescue -- AIG Rescue -- Commercial Paper Funding Facility -- 11. Who Decided that Lehman Should Fail? -- Fed and the Treasury in 2008 -- Henry Paulson's Role in the Lehman Crisis -- Ben Bernanke's Role in the Lehman Crisis -- Why Was Paulson in Charge! -- 12. Explaining the Lehman Decision -- Fear of Political Backlash -- Expectations about the Costs of Lehman's Failure -- Fed's Shift on AIG -- 13. Conclusion.
Summary:
"The bankruptcy of the investment bank Lehman Brothers was the pivotal event of the 2008 financial crisis and the Great Recession that followed. Ever since the bankruptcy, there has been heated debate about why the Federal Reserve did not rescue Lehman in the same way it rescued other financial institutions, such as Bear Stearns and AIG. The Fed's leaders from that time, especially former Chairman Ben Bernanke, have strongly asserted that they lacked the legal authority to save Lehman because it did not have adequate collateral for the loan it needed to survive. Based on a meticulous four-year study of the Lehman case, The Fed and Lehman Brothers debunks the official narrative of the crisis. It shows that in reality, the Fed could have rescued Lehman but officials chose not to because of political pressures and because they underestimated the damage that the bankruptcy would do to the economy. The compelling story of the Lehman collapse will interest anyone who cares about what caused the financial crisis, whether the leaders of the Federal Reserve have given accurate accounts of their actions, and how the Fed can prevent future financial disasters"--Book jacket.
Series Title:
Series Sequence:
OCLC Number:
on1010970425
Availability:
~0
