“The impact to me was, how do you contain this contagion, is there a way you can build a buffer that stops with Lehman?” said John Mack, chairman and CEO of Morgan Stanley. “And clearly it didn’t.”
But that didn't stop the banks from trying.
Lehman clamored for a white knight and other Wall Street leaders grappled with how they could save the drowning bank and ultimatley themselves.
“Finding a solution for Lehman [Brothers] was important for confidence in the national markets and that we ought to do everything we can to insure confidence remains, because ultimately it’s confidence that drives liquidity and capital access for all banks,” said Vikram Pandit, CEO of Citigroup.
Confidence was fading fast though as the weekend wound down and the unimaginable fall of Lehman began to look like an inevitable reality.
“It was stressful, it was emotional, we knew we were playing for big sticks,” said Barclays President Bob Diamond. “So on one hand we knew that if Lehman went into bankruptcy there would be huge implications in the market and on the other hand we wanted to look at whether or not there was a transaction that made sense for Barclays as well as for the markets.”
But, as history would have it, no deal was struck at that time, Lehman fell, and it reverberated throughout the final sector and the global economy.
The aftershocks would be strong and many. One firm after another would be hit; Mack and Pandit would face their own crises yet manage to survive.