The first Congressional hearing into what caused the turmoil on the US markets last month has opened with a glimpse into the chaotic last hours of Lehman brothers.
Lehman’s collapse – the biggest bankruptcy in US history – created a domino effect which led within days to the 500 billion euro bail out for the financial sector.
Lehman’s boss Richard S. Fuld faced tough questions over his personal compensation.
Democrat, Henry Waxman asked, “Your company is now bankrupt, our economy is in crisis, but you get to keep 480 million dollars. I have a very basic question for you, is this fair?”
Fuld insisted US regulators were aware of the full extent of the problem before the bank’s collapse.
One day after Lehman filed for bankruptcy protection, the authorities stepped in to rescue the insurance group AIG to the tune of 62 billion euros.
The panel will hear from former AIG executives later today.