Lehman collapse ‘is good omen’
Tuesday 16th September 2008, 3:01PM BST.
THE collapse of one of the world’s largest investment banks could be a good omen in the longer term, according to a finance industry spokesman.
Geoff Cook, chief executive of industry promoters Jersey Finance (pictured), believes that the crisis might actually solve problems in the financial system.
Reacting to yesterday’s news that US bank Lehman Brothers was insolvent, Mr Cook said that there was likely to be global volatility in the markets for some time to come.
‘In many ways it is a good thing,’ he said. ‘There are problems in the financial system and this will take the weaker players out, which is what is needed to free up the system.’
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my gosh, I think this is the first time in a while someone from the finance industry is telling it how it really is!! Apart from…the comment about the weaker players the system should be evened out by getting rid of these big players who think they can blindfold people when investing large sums of money..
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BNP alone has a unsecured $250,000,000 loan to Lehman Bros according to today’s papers.
That is unlikely to be repaid and there is a further ocean of debt out there.
Banks worldwide are going to pull in their horns, concentrate on their core business areas and try to rebuild their capital base.
If Jersey wants to compete then huge efficency savings are on the cards.
That means letting staff ‘go’, salary reductions and the curtailment of pension rights.
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id like to know what geoff cook means by “free up the system”. it’s not a financial term i’m familiar with. as for getting rid of big players as commented by vicki – merrills went to BoA, most of lehman will be wound down with some assets going elsewhere eg Barclays. so we’ll be left with fewer, bigger players. 5 years down the road the banks won’t need to take the same risks as the consumer will be paying such high prices
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PCC how right you are and as the news of today says, Lloydds TSB with HBOS.
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We have seen the end of HBOS today, LTSB has taken it over and they are already talking about the loss of 40,000 jobs.
Other banks are now ‘in play’. How long before a bank with a lot of staff in Jersey ends up going down?
Will Geoff Cook be there on the pavement talking to the little people who had the misfortune to work for a weaker player?
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Jersey’s lawyers were happy to set up the securitisation structures for many of these toxic assets that have imploded and our administrators administer those structures. I’m not noticing any contrition from them for their part in this sordid tale of greed.
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