Lehman crash: One twelvemonth on
A year ago on Monday one of the United States historic banks, Lehman Brothers, collapsed, create a near meltdown of the monetary corpse and triggering a global recession.
Lehman had lost around $6 billion oer six months on bad trading bets and its mortgage-related assets and investors. Stock analysts feared the ships company was running out of time.
Finally, when the political sympathies decided Lehman wasnt too giant to fail, the storied institution, which traced its history to before the US cultured War, declared bankruptcy on September 15.
But instantaneously the nations biggest banks are bigger and regaining their appetite for risk.
Goldman Sachs, JPMorgan Chase and others - which take over received tens of billions of dollars in federal aid - are at one time more betting big on bonds, commodities and exotic financial products trading that nearly stopped during the financial crisis.
That Wall path is making money again in essentially the alike ways that thrust the banking trunk into chaos farthest snuff it is reason for concern on several levels, financial analysts and government officials say.
There move over been no significant changes to the federal rules government their behaviour.
Proposals that have been made to better monitor the financial system and to police the products banks sell to consumers have been held up by lobbyists, lawmakers and turf-protecting regulators.
finished mergers and the failure of Lehman Brothers, the mammoth banks whose near-collapse prompted government rescues have gotten even bigger, increase the risk they pose to the financial system.
And they still make bets that, in the aggregate, are worth far more than the capital they have on hand to cover against potential losses.
The governments response to last years meltdown was to spend whatever it takes to protect the financial system from collapse - a precedent that could encourage even great risk-taking from the private sector.
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