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Japanese bank steps in to save 2,500 jobs at Lehman in London
Jonathan Prynn, Consumer Affairs Editor23 Sep 2008
The threatened jobs of up to 2,500 Lehman Brothers staff in London were saved today when the bulk of its Canary Wharf operations were sold to a Japanese bank.
The non-US investment banking and share trading arms of the collapsed Wall Street giant have been snapped up by Nomura, administrators PwC announced today.
Lehman Brothers went down on Monday, the first major victim of the five days of banking carnage that shook the world last week.
It was feared that as many as 4,500 jobs in London could be lost following the failure of the 158-year-old bank.
Dan Schwarzmann, joint administrator and partner at PwC, said: "We are able to confirm that we have secured a sale of the investment banking and equities business of Lehman Brothers in the UK and Europe."
As well as the European headquarters in London the deal covers offices in Holland, Qatar, Dubai, Kuwait, Spain, Italy, Germany and Sweden. The deal was announced as shares plunged again when the City was spooked by a warning of "very serious-consequences" by the head of America's Federal Reserve if its proposed US bank lifeboat fails.
By mid afternoon the FTSE was down 71.6 to 5164.6, with high street banks among the biggest fallers.
Ben Bernanke, chairman of America's central bank, urged Congress to back the $700 billion bail-out to stabilise financial markets. Concerns that Democrat-dominated Congress could block the scheme - a last hope to prevent a catastrophic meltdown of America's banking system - sent share markets around the world on a renewed slide in the past 24 hours.
In testimony for delivery to the Senate Banking Committee, Mr Bernanke said: "Global financial markets remain under extraordinary stress. Action by Congress is urgently required."
In separate testimony, US Treasury Secretary Henry Paulson said: "We must take further, decisive action to comprehensively address the root cause of this turmoil." Leading Democratic-politicians have objected to the plan on the grounds that it throws a lifeline to banks without their top executives paying a price for their ill-judged loans. Some have called for a limit on the pay packages of bank directors.
The Bank of England said it would make another £21.6 billion available to the money market in a bid to encourage lending between nervous banks.
