CESR Publishes A Report On The Lehman Brothers Default, And Provides An Assessment Of The Market Impact

On 15 September 2008, Lehman Brothers Holding Inc (LBHI) filed for chapter 11 bankruptcy protection, thus becoming the largest bankruptcy in US history. Following LBHI’s bankruptcy filing, the UK directors of Lehman Brothers International Europe Limited (LBIE) formed the view that the entity was no longer a going concern; it relied on daily cash provision from its US parent and it was clear that this would no longer happen. Accordingly, the directors appointed four partners from PwC as administrators and filed for administration in the early hours of Monday 15 September.

This report approved by CESR has been drafted by the CESR “Lehman Brothers Task Force” chaired by Richard Sutcliffe, Head of Prudential Standards, Conduct and Organisational Policy at the UK FSA. The rapporteur of the task force was Diego Escanero, Senior Officer for investment firms at CESR.