Lehman faces pressure as ex-IMF chief of whopper bank failure
Lehman faces pressure as ex-IMF chief of whopper bank failure
Wednesday 20th August 2008
Lehman Brothers saw a 13.04 per cent fall in its share prices last night as fears over the state of its results grew, while a senior US economist warned the credit crunch would bring a whopper bank to its knees.The investment bank's share price fell $1.96 to $13.07 yesterday on Wall Street as fears the worst of the credit crunch was still to be felt.
This compares with a 52-week high of $67.73.
Analysts at JPMorgan now expect Lehman Brothers to be forced to write off £4 billion in August, following over $8 billion in writedowns already made.
Earlier this year the investment bank posted its first loss – amounting to $2.8 billion for the second quarter – in its 14 years as a listed company.
The New York Times now reports Lehman Brothers could sell off its money management division to raise capital.
Yesterday Kenneth Rogoff – former chief economist at the International Monetary Fund (IMF) – warned another US bank could fail as the US economy was "not out of the woods".
Speaking at a Singapore conference, he said: "I would even go further to say the worst is to come.
"We're not just going to see mid-sized banks go under in the next few months. We're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks."
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