Nick Sawyer On risk

Risk magazine published an article in November 2003 posing the question: what would happen if one of...

Risk magazine published an article in November 2003 posing the question: what would happen if one of the world's largest investment banks pulled out of derivatives? Back then, only a few dealers were stress-testing this scenario. Many thought the idea so outlandish as to not warrant much attention. This year, the unthinkable has happened not once, but twice. First, Bear Stearns was acquired by JP Morgan in March, averting near-certain collapse. Then, Lehman Brothers filed for Chapter 11 bankruptcy protection on 15 September. Throw in Fannie Mae and Freddie Mac, the acquisition of Merrill ...