HSBC blamed for speeding Lehman Brothers' fall: Report

London: By demanding billions of pounds in collateral days before the collapse of Lehman Brothers, Britain's largest bank HSBC is accused of hastening its fall. Lehman Brothers went bankrupt in September 2008, following which the global economic crisis worsened.

"The bank (HSBC) handled clearing and settlement for all Lehman's trades in sterling and much of its Asian business. It started to withdraw credit after the implosion of American investment bank Bear Stearns in March 2008 under a scheme called Project Opaque," The Sunday Times said. "HSBC were not going to allow us to do business. They put a gun to our head," the UK paper quoted a former senior executive at Lehman Carlo Pellerani telling an investigation into the collapse of the investment banker as saying.

A 2,200-page official report published last week delved deep into the collapse of once-famed Wall Street major and highlighted the roles played by senior executives of the bank and auditing firm Ernst & Young, among many others. The report also noted that Citigroup and JPMorgan demanded collaterals from Lehman for loans, which added to the liquidity problems at the bankrupt company.

According to the report, to continue provision of clearing services and intra-day credit that Lehman relied upon for day-to-day operations, the banks demanded collaterals. "In response, Lehman pledged, or attempted to pledge, Lehman-structured instruments, such as certain collateralised loan obligations, to Citigroup and JPMorgan two of its principal settlement banks," it added.