Tuesday, October 21, 2008

Break The Glass

According to this Bloomberg article, Goldman seems to have been aware of the break-the-glass plan from at least the beginning of 2008 as they already had Federal Reserve representatives on the premises in March 2008. I guess it wasn't so secret after all? And how was it shocking news when Goldman and Morgan became bank holding companies at the end of September. And, finally, why wasn't Lehman given permission when asked a few weeks earlier?

"The contingency planning to become a commercial bank had been under way since March, after the collapse of Bear Stearns Cos. sent shivers through Wall Street. That's when Federal Reserve inspectors set up camp at the firm's 85 Broad St. headquarters, a sign of things to come."

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