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Hank Paulson: This Is What It Was Like to Face the Financial Crisis

“Please pray for me”
Hank Paulson: This Is What It Was Like to Face the Financial Crisis
Photograph by Henry Leutwyler for Bloomberg Businessweek

Sept. 15, 2008: Lehman Brothers files for Chapter 11 in the largest-ever U.S. bankruptcy

People weren’t taking Dick Fuld’s calls the weekend before Sept. 15, because Dick had been in denial for a long time. As the CEO of Lehman Brothers, he had asked the New York Fed and the Treasury weeks earlier to put capital into a pool of nonperforming illiquid mortgages that he wanted to put in a subsidiary he called SpinCo and spin off. We had explained that we had no authority to do that. He thought somehow there was something the government could do to help. How could it be that no one would want to buy his company? He just couldn’t believe it.