Lehman Brothers and Barclays have quit sale talks

It’s been reported that Barclays will not go ahead with the purchase of troubled investment bank Lehman Brothers, The reason Barclays walked away from the deal was because it was unable to obtain guarantees in relation to financial commitments faced by Lehman when markets open on Monday.

The New York federal Reserve and the US Treasury has coordinated the rescue plan, The US government had hoped to arrange a bailout under which other US investments banks – such as, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup – would finance a “bad bank” that would hold the most “toxic” investments of Lehman Brothers in the mortgage and property market.

Lehman Brothers may have to file for bankruptcy protection If no other large bank steps up to buy the good parts of the company. The government faces difficult decisions if Lehman cannot secure a deal that does not involve public funds, as it would be unsustainable if the government was to bail out every US bank that was facing difficult times, and it would be difficult if they had to allow the bank to liquidate. We will all be waiting this week to see what the outcome of the Lehman Brothers situation is.

Read the full article in the BBC