Darling accused of double-cross over collapse of Lehman Brothers

[FarCenter]

Suzy Jagger, Sam Coates and Matt Spence

Alistair Darling has been accused by Henry Paulson, the former US Treasury Secretary, of double-crossing America when he effectively vetoed the acquisition of Lehman Brothers by Barclays Bank in September last year.

According to an exclusive extract from Andrew Ross Sorkin’s new book, Too Big To Fail: Inside the Battle to Save Wall Street, published in The Times today, Mr Paulson told bankers that the Chancellor had “grin-f******” the US after London refused to waive legislation that would have allowed Barclays to save the Wall Street bank.

The book — which is published in the UK today — details the final hours leading to the collapse of one of the world’s biggest banks during one weekend in September last year.

The demise of Lehman Brothers in 2008 was widely seen as a tipping point that triggered the world’s biggest economies’ descent into recession.

While the US Government had been adamant it would not use American taxpayer money to bail out the Wall Street bank, regulators on both sides of the Atlantic dramatically underestimated the extent to which the bankruptcy of the lender could pull other banks down with it.

According to Mr Sorkin’s book, one banker involved in the talks that could have saved Lehman Brothers said in disbelief of Britain’s behaviour: “Isn’t this our closest ally in the world?”
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http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6894785.ece

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Never trust an Englishman!

[AllentownJake]

1. Paulson knew the firm was in trouble

For 3 months and sat with his hand up his ass and that is in the same book.