A deepening global financial crisis has claimed a major victim on Wall Street. 158-year old investment house Lehman Brothers (NYSE:LEH) has filed for chapter 11 bankruptcy.
Lehman Brothers was one of the first major international investment houses to open operations in Israel. Israeli firms are exposed through direct holdings in Lehman stocks and bonds, as well as structured products that the investment house has sold to Israeli institutional investors.
The total exposure of Israeli institutional investors to Lehman has been estimated at several hundreds of millions of dollars.
In another major Wall Street development, Merrill Lynch (NYSE:MER) has sold itself to Bank of America, at a value of about $50 billion. Merrill Lynch has an office in Israel, and primarily offers private banking services.
Leader Capital Markets analyst Alon Glazer warned last week that the potential damage to Israeli financial institutions from their exposure to Lehman Brothers could be greater than the risk from the Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) crisis.
Published by Globes [online], Israel business news - www.globes-online.com - on September 15, 2008
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