Former Lehman Brothers CEO Dick Fuld believes the investment bank may have been able to survive if US authorities had given it the same assistance as its rivals.
In a prepared testimony to the commission investigating the credit crisis in Washington, Fuld says the bank gave regulators a number of options which could have possibly averted the September 2008 collapse, or at least allowed an orderly unwinding or takeover.
While the regulators rejected a number of the bank's proposals, Fuld says the authorities did not allow Lehman to participate in its Primary Dealer Credit Facility, which it made available to rivals the day it told Lehman to file for Chapter 11.
"Only Lehman was denied that expanded access. I submit that, had Lehman been granted that same access as its competitors, even as late as that Sunday evening, Lehman would have had time for at least an orderly wind down or for an acquisition which would have alleviated the crisis that ensued," he says.
"There are a number of completely incorrect claims which have been held up as explanations for the demise of Lehman Brothers. To this day, those incorrect claims still persist in the public domain. Just because those incorrect assertions are repeatedly made does not make them true."
Fuld denied there was a capital hole at Lehman Brothers and says the investment bank had adequate financeable collateral.
"In retrospect, there is no question we made some poorly timed business decisions and investments, but we addressed those mistakes and got ourselves back to a strong equity position with a Tier I capital ratio of 11%," he adds.
"We also had financeable collateral and solidly performing businesses. There is nothing about this profile that would indicate a bankrupt company."
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