The collapse of Lehman Brothers
September 15, 2008
They’re falling like ninepins now. Last week it was Dresdner. Today it’s Lehmans. Now there are rumours that Merrill is negotiating an end to it’s independence with Bank of America [update:it’s no longer just a rumour] . Could Morgan Stanley, or even (whisper it) Goldman’s be next ?
I’m proud to say that this is an area where Britain has led the financial world. We used to have independent investment banks like Morgan Grenfell, Barings, Warburgs & Fleming. They all collapsed or sold out ten or more years back. Now our American colleagues are following the trail we blazed !
Recently there’s been a lot of talk about the so called “universal banking model” – institutions that combine retail, commercial, wholesale & private banking with broker dealer trading operations and asset management. I guess this is more validation of that model…
It’s a very sad day for the Lehman staff. I know there are a lot of talented IT people there. They’ll all lose their jobs, and are unlikely to get any kind of pay off. No doubt BoA will lay off a lot of Merrill staff, but should give them a few months money.