Barclays objects to Lehman scrutiny

Barclays Bank is on a roll and it therefore seems strange when the firm is reported to object to further disclosures concerning its takeover of the US operations of Lehman Brothers in autumn 2008. This behaviour will only encourage critics and runs contrary to our advice that full disclosure it the best public relations strategy.

Stability Fund no magic solution for Banking System

Germany seems to move closer to implementing some sort of stability fund for the banking sector. But its promoters already admit that the state (taxpayer) will still have to provide a backstop even in a situation when a fund is in existence. We would agree as the fund would have to be of enormous size if it ever would be able to provide for any crisis. Ironically a similar (simpler?) solution would be for banks to hold more capital reserves - which would effectively be an in-house contingency fund at every institution. Suggestions that other sectors (such as insurance) should also contribute to the fund are based on the argument that they have benefited from the bailout provided by the taxpayer. Now where does this argument end?

Lehman: Masters of the Universe R.I.P.

The sense of hubris that was prevalent at Lehman Brothers before the fall is well documented in a new book The Devil’s Casino: Friendship, Betrayal and the High Stakes Games Played Inside Lehman Brothers, by Vicky Ward. It mentions that one of the top honchos in the firm, Chris Pettit, got by with a personal spending budget of $ 15 million (!!) a year. With leadership of that kind it is no surprise that the company had to hit the rocks sooner or later. The question one has to ask is what lessons - if any - has the securities industry from the credit crunch?