Following the collapse of Lehman Brothers in September 2008, central counterparty LCH.Clearnet had the unenviable task of taking and closing out the brokerage’s outstanding positions, and managing the risk. Over a frenzied two weeks, LCH staff worked to mitigate the damage of the largest corporate bankruptcy in history. Dan Barnes looks at how those frantic days unfolded.
he weeks before Lehman Brothers crashed, there was a lot of
noise in the market about the broker. This was not too
unusual - concerns about Lehman had been circling in the
market for some time and it was an age of rumour.
"There was general concern so we took a closer look to make
sure we hadn’t missed anything, but these
weren’t unfamiliar rumblings," remembers Chris
Jones, head of risk at LCH.Clearnet. "Bear Stearns had been
bought out by JP Morgan under similar conditions earlier in
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