Ten years in the past, funding financial institution Lehman Brothers filed for chapter in the USA. Its UK operations ceased in a while afterwards.
The BBC talked to other people concerned about their memories of the financial institution’s cave in, which gave the monetary disaster contemporary momentum prior to the worst financial downturn the sector had noticed for the reason that 1930s.
Natalia Rogoff, labored in global shopper gross sales at Lehman Brothers
‘Slowly, the anger set in’
We knew when the proportion value went down – all of us went house, it used to be a Friday night time, and we knew we’d now not see Lehman Brothers because it used to be.
We stayed up all night time checking the wires and Bloomberg and the scoop hit.
I bear in mind very vividly, I used to be at a birthday celebration and we have been texting every different, after which this twine hit Bloomberg announcing that Lehman in America [had] filed for chapter. And it used to be one thing unthinkable.
We began calling every different and emailing everybody, “Did you see the news?” We needed to are available at the Monday, and we confronted the entire newshounds out of doors.
The first emotion that hit very exhausting used to be disbelief. There have been no phrases. You got here into the construction and [people were saying], “Did you hear?”, “Yes”, “When did you hear?”, “I was up all night”, “Yes, so was I”, “So, what shall we do?”, “Do you think we’re going to get paid?”, “I don’t know”.
With information as massive as that, it takes some time to sink in. The financial institution collapsed, we’re nonetheless within the construction, there’s no legit information from the control, they’re all in the back of closed doorways, there is not anything from the USA, everybody disappeared.
And then, slowly, the anger set in.
Not many of us know, we have been in reality coming again to paintings each day for the following two weeks.
That used to be a particularly bizarre revel in, since you had no activity, the purchasers have been calling, there used to be not anything to do, other people have been simply strolling round, most likely now not even ingesting that a lot espresso to avoid wasting cash.
Just at the buying and selling flooring, everyone strolling, no-one’s buying and selling, and the telephone’s ringing. The purchasers have been ringing all day lengthy, they have been short of to grasp – the place is their cash, what is going on?
Nikolay Storonsky, Emilie Bellet, Anil Stocker – former Lehmans employees
Sarah Breeden, government director for global banks supervision on the Prudential Regulation Authority
‘I cycled house as speedy as I may just’
I paintings on the Bank of England, and I used to be closely concerned within the paintings that we did to deal with the results of Lehman defaulting again in 2008.
It have been construction for a while.
In the United Kingdom, should you bear in mind, we might had Northern Rock get into troubles within the autumn of 2007, that used to be nationalised in February 2008, after which now not lengthy after Bear Stearns, which used to be the smallest of the USA broker-dealers, were given into bother and used to be rescued via JP Morgan [Chase].
So it wasn’t that during September [the Lehman collapse] used to be a surprise, it have been an match that we might noticed coming for a while, and have been seeking to get able for.
On the Sunday, that used to be when it turned into obvious that Lehman wasn’t going to be rescued – and that used to be the purpose that I were given concerned.
I used to be biking in Richmond Park at Sunday lunchtime with my circle of relatives, were given a telephone name from Paul Tucker [former deputy governor of the Bank of England] to mention, “The US are going to let Lehman’s go, I think we’d better get the team in,” and it began from there.
I cycled house as speedy as I may just, were given at the educate, and I used to be in via 3 o’clock. We were given a small group in combination, and we have been right here until overdue, after which clearly we have been in very first thing on Monday morning.
What we have been seeking to do used to be perceive who had direct exposures to Lehman. There used to be all varieties of paintings occurring desperately seeking to suppose what have been the instant penalties, who could be affected, and the way that will play out in markets usually.
Jes Staley, present Barclays leader government
We have been running maximum weekends at the moment, as a result of there have been issues now not best about Lehman Brothers, however about Merrill Lynch, Morgan Stanley, just about all of the funding banking platform.
At that point I used to be operating JP Morgan Asset Management, and we had the second one greatest liquidity fund on the earth, and the one greatest investor in that fund used to be a big sovereign nation.
I bear in mind one morning, a few days after the Lehman chapter, I were given a choice from Morgan’s London place of job, principally announcing that that giant sovereign sought after to withdraw all in their cash.
And I bear in mind waking up with the decision about three:30 within the morning, and turning to my spouse and mentioned, “This could be a very scary next couple of days.”
They have been terrifying instances. There have been numerous unknowns, it used to be obscure what used to be in point of fact occurring, and Lehman used to be only one domino in a sequence of dominoes.
And the overriding idea after the Lehman chapter used to be: ‘Who’s subsequent’?
Tony Lomas, former lead PwC administrator for Lehman Brothers in the United Kingdom
‘It’s a large forensic workout’
I took a telephone name at the Saturday night time from the pinnacle of criminal within Lehman, who requested me if I might attend a board assembly at the Sunday so they may begin to get ready for the cave in of the entity within the match that there used to be no rescue of the entire team in New York over that weekend.
Well, we went in at the Sunday morning and began to have interaction with the more than a few accounting group of workers there to check out and identify what the organisational construction used to be there, what the criminal entities have been, which criminal entities could be in monetary problem if the mum or dad corporate filed for chapter.
So, it is a large forensic workout that day.
On the Monday morning the primary criminal entity in the United Kingdom had to pay off one thing within the order of $3bn to its buying and selling counterparties, and naturally it used to be dependent upon that money coming in a single day at the Sunday – and it did not come.
As quickly as you might be appointed [as administrator], in fact, you’re taking keep an eye on of the entire entity, and the very first thing you do is identify what belongings it has got, and what liabilities it has got.
And some of the belongings you might be in search of liquid belongings so that you could begin to pay the expenses [that were due imminently]. We wanted about $100m, and we could not to find liquid belongings that will realise that during time.
So what we in reality needed to do used to be to borrow $100m from a hedge fund, which we did via the shut of play at the Wednesday.
The drawback right here used to be that an terrible lot of counterparties traded with Lehman [but] they did not establish the Lehman criminal entity that they have been coping with.
Lehman in the United Kingdom most likely did have as many belongings because it did liabilities, as a result of we now have been in an overly lucky place – we now have been ready to pay off everyone the whole lot they have been owed, and that provides as much as about £36bn-£37bn.
And we have now £8bn left over after that. Now that successfully is what stays of the capital of the United Kingdom subsidiary corporate.