Washington, D.C. – Today Rep. Mark Udall (D-Eldorado Springs) issued the following statement regarding the news that storied investment firm Lehman Brothers Holdings, Inc. has filed for bankruptcy protection:
“Already this year, the Federal Reserve and the Treasury Department used taxpayer dollars to back the takeover of Bear Stearns by JP Morgan and secure the future of Fannie Mae and Freddie Mac. I supported those efforts because the failure of those institutions would have had devastating effects on our economy and job market. But at some point, Wall Street investors have to face the reality that there are consequences when risky investments fail, especially when they are backed by unreliable collateral, like securitized subprime home loans. These highly leveraged investment risks also appear to be behind Bank of America’s announced takeover of Merrill Lynch for less than half of its 2007 trading value.
“The demise of the investment firm Lehman Brothers is disturbing evidence of an ever-weakening financial market. It is now a cautionary tale, and evidence that we need greater transparency and stricter oversight of the financial markets.
“The Bush Administration and the Republican-controlled Congress made deregulation, privatization and blind faith in an unfettered free market the centerpiece of their economic agenda. It's sadly ironic that the removal of limited government oversight has necessitated the unprecedented government intervention we have seen in recent months.
“We need a new approach that will reestablish some ground rules in the marketplace to protect Americans’ investments in the economy and restore their confidence in the financial markets.”
To contact the Udall press office, call Adam Jones at 202-225-2161.