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Reuters Summit-Lehman "living will" would have helped -PwC

Published 09/28/2009, 12:15 PM
Updated 09/28/2009, 12:18 PM

LONDON, Sept 28 (Reuters) - A so-called "living will" would have helped clear up the mess and limit the market aftershock from the collapse of U.S. investment bank Lehman Brothers, the administrator of the bank's operations in Europe said on Monday.

Britain and other countries are discussing forcing banks to write "living wills" that would allow them to be wound down more easily in the event of a collapse.

"It would have helped, no doubt about that," Tony Lomas, chairman of business recovery services at PricewaterhouseCoopers, said in regard to the complex wind-down of Lehman Brothers.

"The more that a bank can do to simplify its affairs ahead of the will being read, the less instability there will be after the will is read," he said at the Reuters Restructuring Summit.

The plans would aim to prevent the failure of a large bank putting the entire financial system at risk, and be guides on how to dismantle operations in the case of bankruptcy -- including up-to-date records of assets, details on IT systems, and other significant data and operational issues.

"They are mostly concerned about calming the market and not having the aftershock we had after Lehman," Lomas said. "You can imagine that authorities here and around the world would like to see far more simplicity so that control can be taken quicker," he added. (For summit blog: http://blogs.reuters.com/summits/) (Reporting by Steve Slater; Editing by Rupert Winchester)

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