Lehman faces pressure as ex-IMF chief of whopper bank failure
Lehman Brothers saw a 13.04 per cent fall in its share prices last night as fears over the state of its results grew, while a senior US economist warned the credit crunch would bring a whopper bank to its knees.
The investment bank's share price fell $1.96 to $13.07 yesterday on Wall Street as fears the worst of the credit crunch was still to be felt.
This compares with a 52-week high of $67.73.
Analysts at JPMorgan now expect Lehman Brothers to be forced to write off £4 billion in August, following over $8 billion in writedowns already made.
Earlier this year the investment bank posted its first loss amounting to $2.8 billion for the second quarter in its 14 years as a listed company.
The New York Times now reports Lehman Brothers could sell off its money management division to raise capital.
Yesterday Kenneth Rogoff former chief economist at the International Monetary Fund (IMF) warned another US bank could fail as the US economy was "not out of the woods".
Speaking at a Singapore conference, he said: "I would even go further to say the worst is to come.
"We're not just going to see mid-sized banks go under in the next few months. We're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks."