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The phrase “Lehman fallout” has become almost white noise in the financial world.  Everything and anything has been attributed to the demise of the onetime banking giant.  At the risk of sounding cliché, everything has indeed changed because of the collapse of Lehman.  Apart from the obvious, the failure of Lehman has opened the floodgates to all kinds of scrutiny and the banks have quite understandably reacted to this new regime of regulation and compliance.…
Account banks, swap counterparties and liquidity facility providers getting downgraded is now the new norm.  Not being able to locate replacements with the requisite ratings and/or the appetite to take on these roles on substantially similar terms is also passé.  In reality, it is frequently the case that nothing changes.  These entities are still performing their obligations and from an operational standpoint, the deal functions as it should.  But the problem arises because of the…
Just a few blissful years ago, one would never think of originators getting wound up or sellers being liquidated. In the world of structured finance, the possibilities of that doomsday scenario were remote, unthinkable and above all, no one wanted to discuss its potential occurrence. That changed with the Lehman collapse and with that, a domino effect ensued. Of course, that’s not to say that the industry never thought of what would happen in that…