It should be clear to all that a deeper examination of the relationship between all the audit firms and their clients on the issue of risk-obfuscation is needed. Limiting any inquiry to Lehman alone is inadequate."
The cost of inaction is likely to be more big bank failures and more meltdowns. Don't take my word for it. Lehman's new chief is among those making scary warnings as Ed Harrison of Credit Writedowns explains:
"Lehman head Brian Marsal warned that Wall Street had not learned its lesson in the credit crisis and that another megabank bankruptcy was likely. Marsal made the remarks while in Berlin for a bankruptcy conference in an interview with German business daily Handelsblatt:
"Handelsblatt: you are handling the largest bankruptcy in human history. Can anything like this happen again?
"Bryan Marsal: It is even likely that a case of Lehman will repeat itself. In any case, as long as nothing fundamental changes in financial regulation and in financial institutions. Wall Street has not really learned a lot from the situation. There is still much too much leverage in the market, and credit default swaps remain completely unregulated. Even with regulators and in the companies little has been done after the global catastrophe."
Underline that: "LITTLE HAS BEEN DONE."
The situation is bad and getting worse. The Wall Street Journal reported recently on its front page about woes in the banking sector, noting banks are experiencing the biggest full year decline in 67 years.
Just two factoids to put in your don't bank on the banks file: