The Lehman collapse: Stephen Lloyd’s view

Stephen Lloyd

Stephen Lloyd

A few recollections of that short period in September stand out vividly  a year later:

The French intern arriving on the train from Paris for his first day at the bank and discovering there was no job to go to  – “I haven’t got anywhere to stay or the money for the fare home”. 

Hearing from a friend, a senior lawyer, who had left his well paid job in private practice to take a senior role with the bank and was due to start that week – suddenly unemployed, and this time not by choice. 

Having lunch that Monday with a managing director at a major investment bank, a sensible, calm, well adjusted sort of person, who told me in all seriousness that he had stocked up not only the larder but also the ammo cupboard; he thought we would soon be in a barter economy and a loaded gun was an essential precaution. I remember laughing at his overreaction, but wondering a week later whether he had been nearer the mark. 

Another startling symbol of the completeness of Lehman’s fall came shortly after, when we were asked to act for the investment banking team which eventually found its way into Nomura.  Arriving at Lehman’s swanky Docklands offices on the following Saturday, a colleague found himself unable to get into the building for the meetings.  He eventually had to call the mobile of the lead PwC liquidator, who personally descended 20 floors and let him into the building – the security staff had all been dismissed – but not before advising my colleague to bring his own coffee and snacks with him.  The vending machines had all been switched off, and the departing staff had emptied them as they left.

A year later, asking a private equity client his views on the outlook, his response was characteristic of those in the financial services industry we deal with: “the outlook is grim, the depression will be deeper and longer than most people realise or expect – but at least we now know the world isn’t about to end”.”