Where was our US bailout: Lehman

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House must pass US bailout: Bush

Washington, October 7:: banks, including Bear Stearns, for capital and liquidity levels. However, that supervision was voluntary, and the SEC ended that program given that those banks have either collapsed or reorganized.

In several hours of testimony before Congress, Fuld spoke methodically and at times seemed to preach financial intricacies to lawmakers, losing patience several times with members who pressed him for precise answers.

Fuld said that throughout 2008, the SEC and the Federal Reserve "actively conducted regular, and at times daily oversight of both our business and balance sheet."

"(Regulators) held regular price verification reviews. They were privy to everything as it was happening," Fuld said in testimony delivered to the House Oversight and Government Reform Committee.

Rep. Henry Waxman, a California Democrat who chairs the panel, is holding hearings to find out what went wrong and what changes are needed in financial services regulation.

The committee obtained thousands of pages of e-mails and other internal Lehman documents that "portray a company in which there was no accountability for failure," Waxman said.

Regulators "failed miserably" to prevent Lehman's collapse and its resulting impact on the US economy, which forced Congress last week to approve a $700 billion bailout for the financial industry, Waxman said.

Lehman's collapse, the government's rescue of AIG, Fannie Mae and Freddie Mac, and frozen credit markets contributed to approval of the bailout.

The bailout empowered the Treasury Department to buy mortgage-backed securities and was designed to thaw out frozen credit markets and restore confidence in financial markets.

SLINGS AND ARROWS

US markets plummeted on Monday as a spate of bank rescues in Europe intensified concerns about the global financial system.

Lawmakers on Monday voiced opposition to the bailout bill, blasted Lehman's actions and took exception with Fuld's compensation, which the committee calculated as nearly $500 million in cash, stock and options from 2000 through 2008.

Rep. Elijah Cummings, a Maryland Democrat, cited an e-mail exchange in which George Walker, President Bush's cousin and a member of the Lehman executive committee, mocked a proposal for top company executives to forego their 2008 bonuses.

Walker responded to the proposal from a fund manager at Lehman unit Neuberger Berman by saying, "Sorry, team. I'm not sure what's in the water" at the unit's headquarters.

Fuld also dismissed the idea. "Don't worry -- they are only people who think about their own pockets," he said in an e-mail to Walker.