Lehman Brothers' downfall 'blamed on UK chancellor'

29 October 2009

The collapse of Lehman Brothers has been partly blamed on UK chancellor Alistair Darling after he reportedly vetoed the acquisition of the organization by Barclays Bank.

US treasury secretary Henry Paulson told bankers that Mr Darling had effectively double-crossed them after he refused to waive legislation that would have allowed a deal between Barclays Bank and Lehman Brothers to proceed, according to a new book on the financial crisis by journalist Andrew Ross Sorkin.

After the potential deal was aborted by Mr Darling on September 14th 2008, partly on the basis that he did not want Lehman Brothers' toxic assets to infect the UK banking system, the US bank was told to prepare for bankruptcy, reports the Times.

But Mr Darling's attempts to protect the UK's economy were in vain as the collapse of Lehman Brothers triggered a global financial crisis.

In October 2008, the chancellor was forced to pump $60 billion into the UK banking sector to save it from meltdown.

By Asim Shah

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