Reactions to the news that the fourth-largest investment bank in the US, Lehman Brothers, will file for bankruptcy protection.
HENRY PAULSON, US TREASURY SECRETARY
I am committed to working with regulators and policymakers - including Congress - to take necessary and appropriate steps to maintain the stability and orderliness of our financial markets.
Paulson upbeat despite turmoil
I am confident in the resilience of our capital markets, and in the commitment of US regulators and market participants to work together through this difficult period...
What we are going through in the short term doesn't make anything easier. But in the longer term, it's going to make things better, because we've got excesses we need to work through...
We do not take - and I don't take - lightly ever putting the taxpayer on the line to support an institution...
There is a reasonable chance that the biggest part of the housing correction can be behind us in a number of months - I'm not saying two or three months but in months as opposed to years.
US PRESIDENT GEORGE W BUSH
I know Americans are concerned about the adjustments that are taking place in our financial markets.
US President George W Bush tries to reassure investors
In the White House, and throughout my administration, we are focused on them and we are working to reduce disruptions and minimise the impact of these financial market developments on the broader economy.
In the short run, adjustments in the financial markets can be painful, both for the people concerned about their investments and for the employees of the affected firms.
In the long run I'm confident that our capital markets are flexible and resilient and can deal with these adjustments.
ALAN GREENSPAN, FORMER US FEDERAL RESERVE BOSS
Let's recognize that this is a once-in-a-half-century, probably once-in-a-century type of event.
There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and it still has a way to go...
We will see other major financial firms fail but this does not need to be a problem. It depends on how it is handled and how the liquidations take place.
And indeed we shouldn't try to protect every single institution. The ordinary course of financial change has winners and losers.
JONATHAN, LEHMAN BROTHERS CONTRACT WORKER
We were just told in the last hour not to come back tomorrow. People are trying to put a brave face on it, in the main.
Obviously there are some disconsolate people in there. People are just trying to come to terms with it.
SPOKESMAN FOR PRIME MINISTER GORDON BROWN
The UK is better placed than in the past to deal with these challenges.
VINCE CABLE, LIB DEM TREASURY SPOKESMAN
Effectively the Bush administration, which is probably the most right-wing government in modern history, was forced to nationalise the whole of the mortgage lending sector and now we have one of the big investment banks on the brink of collapse - I think they've filed for bankruptcy today.
Now the importance of this is that they hold the security - what's called the counter-parties - to trillions of dollars worth of derivatives - swaps, futures, options - and if this pack of cards collapses then the whole of the international financial system goes down with it.
It may be past time to panic already. These are certainly seismic events.
I think these moves may be the most intelligent we have seen so far, allowing Lehman to go because of the flaws in it, but simultaneously shoring up the next domino in the chain, Merrills.
JON MOULTON, ALCHEMY PARTNERS
AIG was until recently the world's largest insurance company. It provides over a hundred billion dollars of capital to banks, and it is in trouble too.
These really are unprecedented days. This is not stress testing, this could be testing where the failure point lies.
ANGELA KNIGHT, CHIEF EXECUTIVE, BRITISH BANKERS' ASSOCIATION
Lehman Brothers is a relatively small player in the UK. As far as UK High Street banks are concerned, they have been recapitalising themselves in the last few months.
Whilst it's not going to be a particularly comfortable day, the issue is one of a major US investment bank which has got into difficulty. No UK bank is in a similar situation.
PETER KENNY, KNIGHT EQUITY MARKETS
The US financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before.
It's a new financial world on the verge of a complete reorganisation.
PETER MORICI, UNIVERSITY OF MARYLAND SCHOOL OF BUSINESS
Lehman executives will find it difficult to replicate their generous compensation elsewhere, but the readjustment of banking compensation to more realistic levels and responsible schemes is necessary to return Wall Street to sanity.
Performance-based compensation practices at Lehman and throughout Wall Street, which pay big bonuses when bankers bet right but only imposes losses on shareholders when they bet wrong, has propagated the kind of toxic financial engineering that caused mortgage-backed securities meltdown, general credit crisis, and the near death experience of many Wall Street banks and securities dealers.
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