ft.com - 10/31/2008
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Wall Street unwittingly created one of the catalysts for the collapse of Bear Stearns, Lehman Brothers and American International Group by backing new bankruptcy rules that were aimed at insulating banks from the failure of a big client, lawyers and bankers say. The 2005 changes made clear that ...
reuters.com - 10/27/2008
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reuters.com —
Graph: 12 key dates in the demise of
Bear Stearns 1: Dec 14, 2006 Bear Stearns posts
record earnings, touting huge profit gains from then-booming businesses advising on mergers and arranging credit derivatives, distressed debt and leveraged finance ...
(more)
Credit Crisis - Reshaping Wall Street
dealbook.blogs.nytimes.com - 11/6/2008
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dealbook.blogs.nytimes.com —
The first clues are emerging that Wall Street
pay will plummet this year — but perhaps not
enough to satisfy the financial industry’s critics, The New York Times’s Ben White writes. Bonuses, which soared to record heights in recent years, could ...
(more)
Wall Street’s Pay Is Expected to Plummet
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Wall Street ‘made rod for own back’
FT Alphaville —
Wall Street unwittingly created one of the catalysts for the collapse of Bear Stearns, Lehman and AIG by backing new bankruptcy rules, lawyers and bankers say. The 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company’s assets until a court decides how to apportion them among creditors. But, the new rules might have accelerated the collapses by removing legal obstacles for banks and hedge funds that wanted to close positions and demand extra collateral from the three ...
Investment Banks Hoist on 2005 Bankruptcy Law Changes Petard
naked capitalism —
... The irony is that carveouts in the 2005 bankruptcy reform bill intended to help investment banks appear to have worked in the opposite fashion. From the Financial Times: ...
Petards
Marginal Revolution —
... extra collateral from
the three companies.
“The changes were introduced to promote the
orderly unwinding of transactions but they ended up speeding up the
bankruptcy process,” said William Goldman, a partner at DLA Piper, the
law firm. “They wanted to protect the likes of Lehman and Bear Stearns
from the domino effect that would have ensued had a counterparty gone
under. They never thought the ones to go under would have been Lehman
and Bear.” Here is the full story. Here is previous MR coverage of this topic. Here is a short ...
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>
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