Paulson: Lehman bailout was never an option

The Frankfurt branch of the Lehman

Brothers bank is pictured in Frankfurt September 15, 2008. U.S. Treasury

Secretary Henry Paulson said Monday that he has never considered to use

taxpayer money to bail out Lehman Brothers, which was choked by the credit

crisis and falling real estate values. (Chinese media/Reuters

Photo)
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Gallery

WASHINGTON, Sept. 15 (Chinese media) -- U.S. Treasury Secretary Henry Paulson said

Monday that he has never considered to use taxpayer money to bail out Lehman

Brothers, which was choked by the credit crisis and falling real estate values.

While briefing reporters at the White House, Paulson

said he "never once" considered that it was appropriate to put taxpayer money on

the line in resolving Lehman Brothers, the fourth-biggest investment bank in the

United States.

The 158-year-old investment bank filed for Chapter 11

bankruptcy protection from its creditors Monday and said it was trying to sell

off key business units.

To discuss the future of Lehman Brothers, an

emergency meeting attended by top Washington policymakers and major financial

institutions, was held Friday at the New York Federal Reserve Bank and lasted

three days.

At the meeting Paulson held firm to the position that

the federal government would not step in and supply any money to resolve the

crisis at Lehman Brothers.

Paulson stressed at the briefing that he did not

"take lightly" any decision to put taxpayer money at risk to prop up a private

company.

As the government refused to provide a financial

backstop to potential buyers, Lehman Brothers's last hope of surviving outside

of court protection faded Sunday after British bank Barclays PLC withdrew its

bid to buy the investment bank.

In the fallout, Merrill Lynch was forced to agree to be sold to Bank of

America, and insurance giant AIG sought to raise cash to head off its own

crisis.

There are possibilities that more financial

institutions could follow these titans' suit, analysts believe, describing the

situation as "a financial hurricane."

Still, the American people can remain confident in

the "soundness and resilience in the American financial system," Paulson said at

the briefing.

Late Sunday, the treasury secretary vowed to take

steps to maintain stability in financial markets.

"I am committed to working with regulators and

policymakers -- including Congress -- to take necessary and appropriate steps to

maintain the stability and orderliness of our financial markets," Paulson said

in a statement issued Sunday night.

"And I will engage with regulators and policymakers

around the world to that end," he said.

Wall Street plunges amid U.S.

financial crisis

Trader Jeff Feldman works in the SP

500 pit at the Chicago Mercantile Exchange, September 15,

2008.(Chinese media/Reuters Photo)
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Gallery

NEW YORK, Sept. 15 (Chinese media) -- New York stocks made

landslide losses on Monday with Dow Jones shedding more than 500 points, as the

U.S. financial turmoil battered investors' confidence in the health of economy.

Lehman Brothers, the fourth biggest U.S. investment bank,

filed for bankruptcy Monday after two most serious buyers Barcklays and Bank of

America (BOA) withdrew from talks to buy the firm. New York-based Lehman, the

biggest U.S. underwriter of mortgage securities, has lost 94 percent of its

market value this year after record losses from investments tied to mortgages.



Lehman Brothers nears bankruptcy as

buyers quit

NEW YORK, Sept. 14 (Chinese media) -- The fourth largest U.S.

investment bank, Lehman Brothers Holdings Inc., prepared to file for bankruptcy

Sunday after Barclays PLC and Bank of America Corp. (BOA) pulled out from talks

to buy the firm.

Barclays, the U.K.'s third biggest bank, and the BOA

withdrew as they could not get guarantees from the government or other Wall

Street firms to protect against potential losses on Lehman's assets.

Bank of America acquires Merrill for

$44 billion

NEW YORK, Sept. 14 (Chinese media) -- Merrill Lynch

Co., the third largest U.S. investment bank, agreed late Sunday to sell itself

to Bank of America Corp. for roughly 44 billion U.S. dollars.

According to the deal, Bank of America will pay 29

dollars per share for the 94-year-old Merrill Lynch, which is 70 percent premium

above Merrill's Friday close at 17.05 dollars per share. However, the offer is

only two-thirds of Merrill's value of one year ago, and half its all-time peak

value of early 2007. Full story

NY mayor: NY "well-positioned" to

handle Wall Street crisis

NEW YORK, Sept. 15 (Chinese media) -- New York Mayor Michael

Bloomberg said Monday the city is "well-positioned" to handle the crisis on Wall

Street, but that it won't be an easy job.

The mayor briefed New Yorkers on the impact of Wall

Street conditions on the city's economy after Lehman Brothers, the

fourth-largest U.S. investment bank, said early Monday that it would file for

bankruptcy, and the Bank of America unveiled plans to buy Merrill Lynch, one of

the world's leading financial management and advisory companies.Full story