Lehman collapse, one year on

15 Sep 2009, 11:33 am   -   Source: Reuters
0 Comments
Share This
+ Comment
0

The demise of Lehman Brothers a year ago sparked the near-collapse of the international financial system, and triggered the worst recession for decades.

RELATED

The demise of Lehman Brothers a year ago sparked the near-collapse of the international financial system, and triggered the worst recession for decades.

It also cost thousands of people their jobs - causing personal and professional traumas that continue to this day.

Lehman, once the fourth-largest U.S. investment bank, filed for bankruptcy protection on Sept. 15, 2008, in the largest U.S. bankruptcy filing in history.

Lehman employees: where are they now?

The Lehman Brothers skyscraper is one of the defining features of London's financial hub, Canary Wharf.

People still work in the building, either as accountants or lawyers drafted in to deal with the aftermath of Lehman's implosion, or as bankers for Nomura who bought Lehman's European assets.

But it's a shadow of its former self, a monument to a once-mighty bank that fell into the abyss.

A far cry from the tumultuous events of 15 September 2008 when the world woke up to news that Lehman was about to bite the dust.

Bankers turned up for work and were immediately told to clear their desks and leave, running the gauntlet of the media as they carried out their belongings in cardboard boxes.

One of the banker who left Lehman Brothers that day was Caroline White. She earned hundreds of thousands of pounds a year, trading derivatives and other financial products.

Now she's traded her entire career - and begun a new life as a designer.

From a tiny studio in East London, White designs handbags and other high-end accessories.

The studio is crammed with mementoes of her Lehman days - from her staff pass to an artwork commissioned in the aftermath of the bank's collapse.

White says her designs are directly inspired by the trauma of losing her job in banking.

"It's been born out of a quite catastrophic event," she says. "Its creation has been behind a concoction of different emotions. I think I'm looking to use those to create some beautiful and unique pieces."

Lehman's global impact

But the impact of the bank's collapse goes far beyond the lives of sacked Lehman staff, and beyond the financial sector generally.

The global recession triggered by the financial crisis has affected just about every aspect of American life.

Trent Bliven is a pilot. Until the recession he worked for a US-funded charity in Africa, flying relief aid to some of the poorest countries on earth.

Then the funding stopped as the US government sought to combat the recession by reminding itself that charity begins at home.

A move that left Bliven grounded - and unemployed.

"We were doing flying, mainly operating planes for relief stuff," Bliven recalls. "Then the company lost their contract from the government, so we couldn't fly any more. So we had to come back."

Bliven was stunned by his misfortune, but for his employment advisor, Fernando Delgardo, such stories are nothing new. "Personally I have had people crying, I've had people very concerned about losing their homes, having to move, being homeless," he says.

That experience is echoed in Japan, where the recession has struck hard, pushing unemployment up to 5.7 per cent in July, a post-war record.

Tomoaki Okada worked for Nissan in Yokohama until he lost his job as demand for cars plummeted in the face of the global downturn.

Then he was evicted from his company apartment and found himself on the streets for a week.

Now he's campaigning for a better deal for people out of work in the world's second-biggest economy.

"I can't help wondering if there's a way to help us a bit more" he reflects. "I spent a week on the streets and I was lucky it wasn't longer. Being homeless is so tough."

Now Okada is hoping the stimulus packages agreed by world governments will lead to a global recovery.

But like many people whose lives were traumatised by the Lehman collapse and by everything that resulted from it, his personal scars will take a long time to heal.

Fallout victims fight for compensation

Hundreds of people took to the streets of Taiwan's capital on Saturday, waving banners and shouting anti-Lehman Brothers slogans to express their anger over lost investments.

Many Taiwanese who lost their investments formed a group called the Lehman Brothers Bond self-help union.

The group consists of investors who bought Lehman structured products from 24 banks in Taiwan, including Taishin International Bank, Fubon Bank, and China Trust.

"Now I have to live a thrifty and I dare not go out. I told them that's my life's saving and that's all I have. I have cancer. The money is for everyday costs and medical treatment. They told me it's free of risk, but now it's all gone," said 53-year-old Ms. Lin.

In a quiet Oxfordshire village in central England, Peter Howard should be enjoying his retirement.

Instead he's fighting Lehman Brothers for compensation after they went bust, taking his investments and many others with it.

"No, I didn't think I had any connection at all with Lehman Brothers. All I saw was a lot of people coming out of their offices and I thought there's a lot of people who have lost their jobs, that's very sad."

Within days he was told everything had gone as Lehmans fell victim to the biggest bankruptcy in U.S. history.

As the funds were based in Holland, British investors were not covered by the UK's compensation scheme.

"I was angry when I found out, and the more I find out about Lehmans, the way it was set up, what they were doing, the negligence of, if you like, the FSA, the companies who sold it didn't do due diligence, they didn't tell us it was Lehmans.

Howard, a retired tax official, now heads up an action group and is fighting for compensation for himself and others.


     
     

 

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube

Join the Discussion

Name
City / Suburb E.g. Artarmon, Sydney
Title
Comment
You have characters remaining.
Validation
What's this?
This is a captcha-picture. It is used to prevent mass-access by robots.
All submitted comments become the property of SBS. They are moderated, so we reserve the right to edit comments and remove HTML tags. Not all submitted comments will be published. Publication does not mean we endorse the opinions expressed. Please read our terms and conditions for more information.