Letting Go Of Lehman Brothers

Mini-case 2 Letting Go of Lehman Brothers Question 1: Do you believe that the U.S. government treated some pecuniary institutions otherwise during the crisis? Was that appropriate? To assure the financial st cleverness and viability of the U.S. financial system, the U.S. federal official check, the Comptroller of the Currency and the federal Deposit restitution caller-up (FDIC) have the responsibility to support, protect and buffer financial institutions whose afflictions, they believe, competency have a significant effect on the marketplace as a whole. Before making a finality about whether an institution should be poured capital into, the Federal Reserve will consider the institution`s indirect and the ability to repay loans. The Federal Reserve said that the companies that did learn bailouts, much(prenominal) as AIG, Fannie Mae and, Freddie Mac, clearly had the confirming and showed great promise of nonrecreational them back in the future, while Lehman Brothers did not. When Federal Reserve precede Ben Bernanke was asked how the Lehman case differed from that of American International Group Inc., which received $182 trillion in taxpayer aid, Bernanke said there was a fundamental difference. They believed AIG, as the biggest insurance company in the U.S., had valuable assets which could back up the Feds emergency loan.

So the Federal Reserve will dead be paid back by AIG. However, Richard S. Fuld Jr., the former professorship and chief executive officer of Lehman Brother, said that they did have the collateral and the capital, and should have been bailed out. He also stated that Lehman was forced into failure not because it negl ected to act responsibly or submit solutio! ns to the crisis, but because of a decision, based on flawed information, not to provide Lehman with the support given to each of its competitors. (Lewis, 2010) Zakaria (2010) believes that the collapse of Lehman Brothers understructure the political system into coming to the rescue, into recognizing that this was a huge, deep...If you want to material body a full essay, order it on our website: OrderEssay.net

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