We were powerless to save Lehman, says Paulson

The US Treasury and the Federal Reserve had to let Lehman Brothers fail because the now-defunct investment bank did not have enough good collateral on its books to guarantee a Fed loan, Hank Paulson, the US treasury secretary, has said.

Paulson told the New York Times, a newspaper: "We didn't have the powers. By law, the Federal Reserve could bail out Lehman with a loan only if the bank had enough good assets to serve as collateral, which it did not."

He added: "If someone thinks Hank Paulson

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