So, Lehman\’s is spiralling the plug hole and various people are trying to get various politicians to intervene:
During the bank\’s final hours in September 2008, Fuld tried desperately to strike a rescue deal with Barclays but the FSA would not allow the British bank an exemption from seeking time-consuming shareholder approval. The chancellor, Alistair Darling, declined to intervene and Fuld appealed to the US treasury secretary, Henry Paulson, to contact the prime minister.
\”Fuld asked Paulson to call prime minister Gordon Brown, but Paulson said he could not do that,\” says the examiner\’s report. \”Fuld asked Paulson to ask president Bush to call Brown, but Paulson said he was working on other ideas.\”
In a \”brainstorming\” session, Fuld then suggested getting the president\’s brother, Jeb Bush, who was a Lehman adviser, to get the White House to lean on Downing Street.
All of this of course being exactly the right thing to do.
All of which was in fact what was done when Lloyd\’s was suckered into taking over HBOS.
All of which is what the Bank of England has traditionally done in a financial crisis. Knocked heads together, engineered a take over and told everyone to shut up and get on with it.
Now maybe Darling and the rest were right in this case, maybe they were wrong, that\’s an entirely different matter. But the attempt to engineer the takeover was at least sensible, whatever decision was made about whether it should happen or not.