Dick Fuld has admitted mistakes. He has said he was wrong. He testified to Congress “bad judgments were made regarding the market.” But he has never taken full-throated responsibility.
Fuld was the CEO at investment bank Lehman Brothers when it collapsed in September 2008. It’s bankruptcy helped spread the financial industry’s troubles to the broader economy. It triggered an investor rush to cash, prompting the FDIC to raise its insurance for bank deposits and led the Treasury Department to temporarily guarantee money market mutual funds.
Five years ago, Fuld told The Financial Crisis Inquiry Commission the failure of the bank he led was because of “uncontrollable market forces,” “incorrect perception” and “accompanying rumors” regarding Lehman’s financial resources. The financial autopsy questioned Lehman’s risk-taking, its accounting and the firm’s understanding of its own investments.
Unlike other financial institutions, Lehman was not rescued using taxpayers’ money. Instead, it was a quick collapse causing deep harm and a messy aftermath that has taken years to clean up.
In the new week, Fuld is scheduled to make a rare public appearance. He will give a speech at an investor conference geared toward very small publicly traded companies. Organizers call it his first major public appearance since the Lehman failure. If that’s true, it will be the first that isn’t before a Congressional committee.
Why would investors be interested in what a disgraced investment-banking boss has to say? Banks are bigger today compared to seven years ago. The financial risks are more interconnected now. Who better to pass judgment on today’s market environment than one who has been judged but hasn’t fully owned up to his role in the last financial disaster?
Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.