Transcript Tony Lomas

Regulatory response to the Financial Crisis
Lehmans UK
19 January 2009
Advisory
Lehman UK’s position in the group
LB Holdings Inc
Intermediate Holdcos
LBHI2L
LBL
(England)
(England)
99%
1%
LBIE
(England)
LBJ
LBASIA
LBI
(Japan)
(Hong Kong)
(USA)
LBSF
LBF
LBCC
LB Lux
(USA)
(Switzerland)
(USA)
(Luxembourg)
(Equity)
(FX)
(Stock loan
borrows)
(Credit & Interest
rates)
Lehman – what the client can see
LBI
LBIE
•
FED and SEC oversight
•
BoE and FSA oversight
•
Five day window to settle
trades and negotiate client
transfers
•
Administrator with Rules
•
Immediate seizure
•
•
SIPA trustee and rules
SIPC Compensation
Scheme
-
Failure of trades
-
Freezing of assets
-
Suspension of services
-
Absence of information
•
Uncertain value and timing
•
Diminishing confidence
Lehman UK: Intervention v Market Solutions
•
Sounding board
•
Facilitator
-
Clients
-
Other regulators
-
Government
•
Regulation ongoing
•
Observer and discussant
Lehman UK: Some lessons learned
•
Retention of trust assets
•
Contingency Plan
•
Off-exchange default rules
•
Liquid reserves in London
•
Multi-lateral account reconciliation
•
Good bank/Bank bank separation