Lacker & Plosser: No Deal! (at least none funded by US)

Lacker & Plosser:

Richmond Fed President Jeffrey Lacker and his Philadelphia counterpart Charles Plosser raised concerns about moral hazard in June, urging that lines be set for any central bank intervention. U.S. regulators reluctant to backstop another investment bank may point to the fact that speculation about Lehman’s potential failure hasn’t generated as much concern among investors as Bear Stearns’s implosion.

Lawrence Meyer:

"What would be best is to alter the precedent with Bear Stearns,” said former Fed governor Laurence Meyer, who is now vice chairman of Macroeconomic Advisers LLC, an economic forecasting firm in Washington.


Sources says no government money in resolution of Lehman’s situation; Two things will make this deal different: 1) the market has been aware of the situation and has had time to prepare; 2)Fed’s primary dealer credit facility now exists to allow for orderly process

See also:
Lehman’s Fuld Races to Sell Firm as Fed Balks at Deal
Yalman Onaran
Bloomberg, Sept. 12

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