Financial Crisis

Lehman: Fed Should Have Saved Bank

Former Lehman Brothers head Dick Fuld said the Federal Reserve should not have let his bank fail in September 2008, saying that as the financial crisis began, the Fed expanded access to its credit facilities to other banks but excluded Lehman. In his testimony before the Financial Crisis Inquiry Commission, Fuld blamed other banks for insisting on billions of dollars in cash against loans to Lehman, and that Morgan Stanley and Goldman Sachs would have collapsed without the aid of the federal government. The Fed countered that it knew Lehman could never repay if it provided emergency funds. The congressional commission released thousands of pages of documents, including an email written by Jim Wilkinson, chief of staff to then-Treasury secretary Hank Paulson, saying, “I just can’t stomach us bailing out Lehman. Will be horrible in the press.”