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Article: Out of the frying pan; Investment banks.
- Article from:
- The Economist (US)
- Article date:
- June 7, 2008
CopyrightCOPYRIGHT 2008 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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And into the line of fire of those keen to constrain Wall Street's free-wheeling ways
"THE worst is behind us," proclaimed Dick Fuld, Lehman Brothers' boss, in April. If only. Although the overall financial system may be safer, thanks to extraordinary central-bank interventions before and just after the rescue of Bear Stearns, America's investment banks still make investors nervous, not least in the market that puts a price on the risk of default (see chart). The longer this goes on, the more onlookers are tempted to conclude that Wall Street's business model is broken. With tougher regulation on the cards, this crisis may, they fear, be less a cyclical slump ...