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Wednesday, March 26, 2008 8:42:57 AM
Lehman Closes Subprime Unit and Lays Off 1,200
By JENNY ANDERSON and VIKAS BAJAJ
Published: August 23, 2007
Lehman Brothers, a leader in packaging subprime mortgages into securities, said yesterday that it would shut one of its home lending units and lay off 1,200 employees. The bank said it would take a $52 million charge to third-quarter earnings.
“Lehman Brothers announced today that market conditions have necessitated a substantial reduction in its resources and capacity in the subprime space,” the firm said in a news release.
The announcement came on a day when Wall Street’s concerns about the credit markets seemed to ease, at least for now; the three major markets all rose more than 1 percent. The rush to the safety of short-term Treasury markets also slowed.
As part of the effort to calm the markets, several banks, at the prompting of the Federal Reserve, borrowed $2 billion from the discount window.
By JENNY ANDERSON and VIKAS BAJAJ
Published: August 23, 2007
Lehman Brothers, a leader in packaging subprime mortgages into securities, said yesterday that it would shut one of its home lending units and lay off 1,200 employees. The bank said it would take a $52 million charge to third-quarter earnings.
“Lehman Brothers announced today that market conditions have necessitated a substantial reduction in its resources and capacity in the subprime space,” the firm said in a news release.
The announcement came on a day when Wall Street’s concerns about the credit markets seemed to ease, at least for now; the three major markets all rose more than 1 percent. The rush to the safety of short-term Treasury markets also slowed.
As part of the effort to calm the markets, several banks, at the prompting of the Federal Reserve, borrowed $2 billion from the discount window.
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