Lehman

A Lehman employee yesterday.

No such thing. Are you looking for the Amish hardware store?

Actually, Lehman is a thing, and it drifts on like nosferatu, the un-dead, still spreading its influence over everything we do in a way that its bodily manifestation in life was plainly unable to. MF Global has a similar effect, though there, memories fade. We are but mortal.

For Lehman is a risk controller’s magic incantation — a hex, a horcrux, a way of killing lively debate stone dead in its tracks. For any new initiative, any pragmatic proposal to do things in a smarter way, can be derailed by oblique reference to the sad demise of Lehman brothers, however irrelevant it may be. For, as we all know, the sky fell in on Lehman’s head because it tried to standardize its business and create robust operational flows that didn't involve credit sitting on cross default escalations for three weeks.

Had only its credit team been allowed to vacillate nervously for weeks upon end about whether to waive Credit Event Upon Merger for Hedge fund clients, Lehman might still be with us today.

See also

• MF Global
• Nosferatu
• Chicken Licken