U.S. May Broker Rescue of Lehman Bros.

Los Angeles Times (09/12/08); Gosselin, Peter G.; Hamilton, Walter
Worried that a collapse of Lehman Bros. could cause a chain reaction in the financial system and bring down numerous other firms, the Federal Reserve and the Treasury Department reportedly have held discussions with Lehman and potential buyers in an attempt to facilitate a sale of the investment bank. Lehman apparently has given up its quest to remain independent after watching its stock plunge 70 percent in just the past three days. However, a government-assisted sale of the Wall Street institution could result in a political uproar only days after Treasury committed to invest up to $100 billion of taxpayer money in Fannie Mae and Freddie Mac to keep them solvent. Bank of America Corp. and British banks HSBC Holdings and Barclays are among the leading contenders to acquire Lehman, although other international banks may also be in play.