Letting Lehman go was a mistake. The event triggered a three-month market panic the likes of which no one living can remember, shutting down the interbank credit market and the commercial paper market and causing an instant run on money-market funds, and on the debt and stock prices of other large banks and investment banks. Full Story »
Posted by Derek Hawkins - via Google News (Business)
Interesting opinion on how to prevent future financial meltdowns from Roy Smith, a Stern Business School professor. The author argues that we need to find new ways to reduce systemic risk in global capital markets, without requiring government intervention. This perspective is not unreasonable but a bit shallow. While it makes a good case for the need to restrain the capital pool, I would have liked to see more concrete examples of how to best regulate banking activity.
Today on NewsTrust, we're comparing sparring opinions about Lehman Brothers -- and whether a taxpayer bailout of the firm would have helped stem the financial crisis. I've reviewed one opinion below. More stories on our U.S. Economy page: http://newstrust.net/topics/us_economy