DICK FULD, Lehman Brothers’ chief executive, took personal responsibility yesterday for the investment bank’s embarrassing $2.8 billion first-quarter loss, the first in its 14-year history as a public company, but said he remained confident in its future prospects as an independent entity.
“This is my responsibility,” Mr Fuld said during a rare appearance on a conference call to discuss quarterly earnings.“We made active decisions to deploy our capital, some of which in hindsight were poor choices because we really didn’t act quickly enough to the eroding environment.”
Mr Fuld also rejected arguments that Lehman’s earnings power had been permanently eroded by the evaporation of significant fixed-income revenues, especially in mortgage-related products, and by the bank’s decision to reduce dramatically its reliance on borrowed money to boost profits.
Shares in Lehman Brothers rose 4.15 per cent in midday trade to $26.88 as the bank formally disclosed a second-quarter loss that was in line with the preliminary figures released last week.
The $2.8 billion loss led to the removal late last week of Joe Gregory, Lehman’s president, and Erin Callan, chief financial officer. – (Financial Times service)
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