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Lehman Brothers--Assessing The Immediate Consequences For European Banks Sep 08
Standard & Poors, Sep 2008
Abstract
The Chapter 11 filing of Lehman Brothers Holdings Inc. (LBHI; SD/--/SD) on Sept. 15, 2008, is a seismic event in the global financial markets. This article considers the implications of the filing for the European banking sector. In summary, the information that Standard & Poor's Ratings Services has received so far indicates that European banks' direct net exposures to LBHI and its subsidiaries are generally moderate and manageable. This conclusion principally reflects the widespread use of credit mitigation techniques such as netting, collateral management, and margin calls. A more significant factor is likely to be a fall in asset prices as Lehman entities unwind trading positions and manage down their balance sheets. This could lead to further material write-downs in...
Companies mentioned in this report are: Deutsche Bank AG,BNP Paribas,The Royal Bank of Scotland PLC,Societe Generale,Barclays Bank PLC,Lehman Brothers Holdings Inc.,Credit Suisse AG,UBS AG
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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