NEW YORK—In a rare public appearance, former Lehman Brothers Holdings Inc. CEO Dick Fuld said that U.S. regulators denied his firm the same assistance it later provided other Wall Street banks, thus exacerbating the financial crisis of 2008.
Fuld told the Financial Crisis Inquiry Commission (FCIC) on Wednesday that his bank provided the Federal Reserve and the U.S. Department of Treasury a menu of options including allowing the firm to become a bank holding company—all of which the regulators rejected.
The FCIC is holding a two-day meeting to examine the concept of “too big to fail,” specifically looking at the events leading up to two of the largest bank failures in history, those of Lehman and Wachovia Corp.
Fuld argued, in prepared remarks, that weeks after Lehman declared bankruptcy, federal regulators granted the same options Lehman proposed to other banks, averting a financial disaster and further market turmoil.
“Only Lehman was denied that expanded access,” Fuld said in his remarks. “I submit, that had Lehman been granted that same access as its competitors, even as late as that Sunday (Sep. 14, 2008) 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.”
Robert Steel, former chief executive of Wachovia, also testified on Wednesday. On Thursday, Federal Reserve Chairman Benjamin Bernanke and Federal Deposit Insurance Corporation Chairwoman Sheila Bair will speak.
Fuld told the Financial Crisis Inquiry Commission (FCIC) on Wednesday that his bank provided the Federal Reserve and the U.S. Department of Treasury a menu of options including allowing the firm to become a bank holding company—all of which the regulators rejected.
The FCIC is holding a two-day meeting to examine the concept of “too big to fail,” specifically looking at the events leading up to two of the largest bank failures in history, those of Lehman and Wachovia Corp.
Fuld argued, in prepared remarks, that weeks after Lehman declared bankruptcy, federal regulators granted the same options Lehman proposed to other banks, averting a financial disaster and further market turmoil.
“Only Lehman was denied that expanded access,” Fuld said in his remarks. “I submit, that had Lehman been granted that same access as its competitors, even as late as that Sunday (Sep. 14, 2008) 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.”
Robert Steel, former chief executive of Wachovia, also testified on Wednesday. On Thursday, Federal Reserve Chairman Benjamin Bernanke and Federal Deposit Insurance Corporation Chairwoman Sheila Bair will speak.
