Five Years After Crisis, Banks No Better Off

[marmar]

from Der Spiegel:



The collapse of Lehman Brothers shook the global financial system to its core five years ago. Nevertheless, lawmakers continue to shy away from making the necessary reforms.

Andreas Dombret has to laugh out loud when he recalls the weekend preceding what some thought would be the end of the world as we know it. It was the weekend before Sept. 15, 2008, and Dombret was the head of Bank of America's German operations at the time. On Friday, Sept. 12, he learned from CEO Ken Lewis that the bank planned to negotiate the takeover of investment bank Lehman Brothers that weekend, and that all top executives were to make the necessary preparations.

Dombret spent that Saturday digging through Lehman files. On Sunday, he received another call from the United States, informing him that Bank of America was not going to acquire Lehman, after all, but another US investment bank, Merrill Lynch, instead. Dombret felt that Merrill was a better fit, but he also sensed that Lehman was about to drag his industry and the rest of the world to the brink of ruin on the very next day.

Lehman declared bankruptcy on Monday. On Tuesday, it was clear that the shock waves from the Lehman collapse were going to affect everyone, including Dombret's Bank of America and Merrill Lynch, which required billions in bailout funds from the US government. In Germany, Hypo Real Estate (HRE) and Commerzbank were also caught up in the turmoil, and throughout Europe entire governments sought to avert the impending meltdown of the financial system by nationalizing banks. ....................(more)

The complete piece is at: http://www.spiegel.de/international/business/bank-reforms-needed-five-years-after-financial-crisis-a-919725.html

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