Barclehs: It’s On

The FT reports that Barclays is swooping in on its white horse and scooping up the distressed Lehman Brothers:

The two parties reached an agreement in the New York morning that centres around Lehman’s core US broker-dealer operations, which perform securities underwriting tasks, provide merger advice to lucrative clients, and conduct trading.

Cunningly, Barclays is confining the deal in the first instance only to Lehman’s US operations: if the European and Asian parts of Lehman would also like to join the Brits, they’re going to have to take a ticket and ask very nicely.

The good news is that this deal should slash the amount of counterparty risk associated with Lehman. The bad news, of course, is that it doesn’t even touch the much larger amount of counterparty risk associated with AIG. This crisis is far from over yet.

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