A couple weeks before the two-year anniversary of his former firm’s collapse, a testy Dick Fuld is testifying today before the Financial Crisis Inquiry Commission. From his prepared remarks, here’s a list of excuses he’s running by government officials.
• First of all, “the incorrect perception and accompanying rumors that Lehman did not have sufficient capital to support its investments.”
• Unfair treatment by the government: “Lehman was the only firm that was mandated by government regulators to file for bankruptcy.”
• The Fed should’ve opened its funds window to supply liquidity to the financial system. “I believed then, and still do now, that had the Fed opened the financing window to investment banks just before the Bear Stearns problem, that decision might have provided the necessary liquidity to keep Bear Stearns operational and, more importantly, might have lessened the need for additional government intervention.”
• The government should’ve let Lehman turn itself into a bank holding company (it later did this with Goldman Sachs and Morgan Stanley)
• The government should’ve banned naked short selling (it did this after Lehman’s bankruptcy filing)
Then Fuld brings it on home:
In the end, however, Lehman was forced into bankruptcy not because it neglected to act responsibly or seek solutions 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 and other nonfinancial firms in the ensuing days.
