2008 retold

2008 retold: Lehman bail-in averts broader crisis

12 Sep 2013

Regulators used tools granted by the SOB Act for the first time to recapitalize the Wall Street firm this weekend. Its equity, preferred and sub-debt was wiped out. Bondholders took just a 20 pct haircut but may be made whole. The market must brace for other big bank “bail-ins.”

2008 retold: EU bank bail-in saves taxpayer bacon

12 Sep 2013

Thank God for Northern Rock. The collapse of the UK lender last year focused European minds, enabling a common bail-in regime, the OMFG, in double-quick time. That’s allowed 12 banks to hike their capital positions by 250 bln euros - none of which has come from public coffers.

2008 retold: Lehman rescue to punish stocks

12 Sep 2013

The overnight deal to avoid a bankruptcy of the Wall St firm has unleashed big swings across all assets. Money market tensions and currency volatility will continue for a few weeks. But the way the bank was salvaged means equities, particularly bank stocks, could suffer the most.

2008 retold: Lehman clawbacks should go further

12 Sep 2013

Disgraced CEO Dick Fuld and his cohorts burned billions of shareholders’ wealth but will only need to cough up two years’ back pay under the SOB Act’s new rules. Given the pain inflicted on holders of Lehman stock, preferred and subordinate debt, the execs are getting off easy.

2008 retold: Lehman bail-in not one-size-fits-all

12 Sep 2013

The shareholder wipeout and bondholder buzz-cut averted a Chapter 11 filing for the Wall Street firm. Versions of this may work for troubled giants, such as Merrill Lynch. For smaller fry, like WaMu, an outright sale may be preferable. Regulators must focus on systemic risks.