It will never been known what might have happened if Lehman Brothers had not collapsed in 2008, unleashing a wave of panic on the financial markets that led to the bailout of banks around the world.
But Tim Geithner, president of the New York Federal Reserve bank at the time of Lehman's difficulties, admits that he would have backed a deal allowing Barclays to buy the Wall Street firm, potentially staving off its collapse. According to his book, Stress Test, Geithner would have supported the use of US public money to finance a loan helping Barclays secure a deal.
"In the end I'm confident the Fed would have helped finance a deal with a willing buyer," Geithner writes. But he also makes the point that this still would not have surmounted another stumbling block: that Barclays was required to put its takeover to a shareholder vote and that a loan "would not have eliminated the risk to Barclays".
In the end, the barriers to Barclays taking over Lehman Brothers were too high. But then, just days after Lehman's collapse in September 2008, Barclays was picking off the Wall Street operations of the business and embarking on a rapid expansion of its investment banking arm.
Five years on, Barclays has announced it will be closing large parts of the investment banking arm again, axing almost one in three jobs. A comment piece in the German newspaper Handelsblatt has urged Deutsche Bank to become a European investment bank capable of competing with Goldman Sachs and Morgan Stanley, now that Barclays is retrenching. Cue a mass arrival of CVs from Barclays' bankers.
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