FRANKFURT: European central banks will book hardly any losses from the default of U.S. investment bank Lehman Brothers four years ago, Germany's Bundesbank said on Thursday.
The Bundesbank, representative for the European central banks, manages the sale of securities, which Lehman posted as collateral for taking 8.5 billion euros from the European Central Bank in 2008. Lehman defaulted in September 2008.
"Overall, we are very pleased with the realisation process. At the end of the process, we will achieve very good results for the euro system," said Bundesbank board member Joachim Nagel, adding that the process should be completed this year.
"We will get relatively close to the 8.5 billion euros," Nagel said.
The default of Lehman Brothers brought the global financial system to the brink of collapse and sent financial markets into a tailspin, triggering hefty losses for institutions around the globe.
The securities portfolio consisted of 32 mainly asset-backed securities (ABS) and one government bond, of which 28 papers have already been sold.
Among those still left to sell is the Excalibur vehicle, which had a nominal value of 2.16 billion euros in 2008 and of 1.3 billion euros at the end of last year.
Excalibur is the largest position in the portfolio. The Financial Times reported on Monday that the Bundesbank had agreed to sell half of the 1.8 billion euro Excalibur vehicle to Lone Star, the private equity group.
The Bundesbank declined to comment on details of the selling process. But Nagel said he expected the sales of Excalibur to be completed by the beginning of February.
indiatimes.com
The Bundesbank, representative for the European central banks, manages the sale of securities, which Lehman posted as collateral for taking 8.5 billion euros from the European Central Bank in 2008. Lehman defaulted in September 2008.
"Overall, we are very pleased with the realisation process. At the end of the process, we will achieve very good results for the euro system," said Bundesbank board member Joachim Nagel, adding that the process should be completed this year.
"We will get relatively close to the 8.5 billion euros," Nagel said.
The default of Lehman Brothers brought the global financial system to the brink of collapse and sent financial markets into a tailspin, triggering hefty losses for institutions around the globe.
The securities portfolio consisted of 32 mainly asset-backed securities (ABS) and one government bond, of which 28 papers have already been sold.
Among those still left to sell is the Excalibur vehicle, which had a nominal value of 2.16 billion euros in 2008 and of 1.3 billion euros at the end of last year.
Excalibur is the largest position in the portfolio. The Financial Times reported on Monday that the Bundesbank had agreed to sell half of the 1.8 billion euro Excalibur vehicle to Lone Star, the private equity group.
The Bundesbank declined to comment on details of the selling process. But Nagel said he expected the sales of Excalibur to be completed by the beginning of February.
indiatimes.com
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