Lehman Bankruptcy - Scenes from IT Ops
I was onsite at a bank today and the IT Operations was slightly more busy than usual due to the demise of Lehman. So what happens when a bank's counterparty fails? Heres' a brief insight from the IT perspective:
a. They stop all payments sent out to Lehman - via their payment systems, SWIFT, CLS, etc.
b. They start filtering out Lehman trades in their P&L reports or meddle with the reports to reflect restructuring fees
There was relatively calm across the department as they appeared ready for this eventuality and were reporting back to work day before yesterday. Not exactly sure what's happening in their trading desks or the risk departments, must be quite a scene ;-)
3 comments:
Heard from folks back home that people have begun queueing up outside AIA's (AIG) building waiting to cash in their insurance policies.
Any news on AIG's exposure to the Lehman's fallout? Hmm... I left my insurance policies in Singapore. Darn.
CK, your policies are safe, I would not worry about it - as least this is what MAS is telling us here.
http://www.mas.gov.sg/news_room/letters_to_editors/2008/Comments_by_MAS_Spokesperson_on_AIA.html
AIG is now (almost) nationalised so any further writedowns will be borne by the US taxpayers ;-)
My guess is that AIG will sell off their insurance business in Asia to shore up their battered balance sheet.
I heard that Ooi is buying up AIG's stocks as it continues its slide. That's a vote of confidence I believe.
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