The collapse of Lehman Brothers demonstrates the credit crunch is not over, according to an industry expert.
Michael Baxter, economist at Defaqto, claims that
banks in the UK may now be "even more reluctant" to lend to each other following the announcement yesterday tat the large US bank was filing for bankruptcy.
He adds that "a lot of problems" will have been created for UK
banks because Lehman Brothers was "integral to the overall banking system".
"It probably suggests that the credit crunch is not over or near the end or halfway through as people have suggested because the banks are going be even more reluctant to start lending to each other after this," said Mr Baxter.
Four partners from Big 4 firm PricewaterhouseCoopers have been appointed joint administrators for the UK trading arm of Lehman Brothers International.
Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis are set to wind down the three UK incorporated companies affected, namely Lehman Brothers Ltd, LB Holdings PLC and LB UK RE Holdings.
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