Emergency meeting on Lehman rescue resumes
WASHINGTON - With the global financial system holding its collective breath, the U.S. government scrambled Saturday to help devise a rescue for Lehman Brothers and restore confidence in Wall Street and the American financial structure.
An official from the Federal Reserve Bank of New York, who asked not to be named due to the sensitivity of the talks, said deliberations have resumed with leading Wall Street executives and top U.S. financial officials.
They include Treasury Secretary Henry Paulson, Timothy Geithner, president of the New York Fed, and Securities and Exchange Commission Chairman Christopher Cox. They were meeting on the heels of an emergency session convened Friday night by Geithner — the Fed's point person on financial crises.
Participants in Saturday's discussions also include executives from Goldman Sachs, JPMorgan Chase, Morgan Stanley, Citigroup and Merrill Lynch.
Federal Reserve Chairman Ben Bernanke is actively engaged in the deliberations but wasn't in attendance.
Fed and Treasury officials are aiming to engineer a private-sector rescue for the troubled firm that doesn't involve government money. Options include selling Lehman outright or breaking it up into pieces to be sold to private firms.
Potential buyers could include Bank of America Corp., Britain's Barclay's Plc, Japan's Nomura Securities, France's BNP Paribas and Deutsche Bank AG. All have declined to comment.
Global fears intensified Saturday that the collapse of the country's fourth-largest investment bank would stagger markets and undercut confidence in the U.S. financial system.
U.S. regulators face growing pressure from abroad to find a way out ahead of Monday's reopening of Asian markets. Germany's Finance Minister Peer Steinbrueck urged that a resolution be found before then, warning ominously, "the news that is coming out of the U.S. is bad."
Lehman Brothers Holdings Inc. put itself on the block earlier this week. Bad bets on real-estate holdings — which have factored into bank failures and taken out other financial companies — have thrust the 158-year-old firm in peril. Its stock has been hammered and it has been dogged by growing doubts about whether other financial institutions would continue to do business with it |
