Treasury, Fed. Call on Wall Street to Back Lehman (Bradley Keoun and Jesse Westbrook)

Created by : Francis Goodwin View profile

(Bloomberg) -- U.S. Treasury Secretary Henry Paulson and New York Federal Reserve Bank President Timothy Geithner urged the heads of Wall Street's biggest firms to find a solution to the plight of Lehman Brothers Holdings Inc., signaling their reluctance to use government funds to bail out the investment bank, two people familiar with the talks said.

Chief executive officers who attended the meeting at the New York Fed late yesterday afternoon included Citigroup Inc.'s Vikram Pandit, JPMorgan Chase & Co.'s Jamie Dimon, Morgan Stanley's John Mack, Goldman Sachs Group Inc.'s Lloyd Blankfein, Merrill Lynch & Co.'s John Thain and Bank of New York Mellon Corp.'s Robert Kelly, the people said, declining to be identified because the meeting wasn't public. Christopher Cox, chairman of the U.S. Securities and Exchange Commission, also participated.

{xtypo_quote_left} "We might have a Mexican standoff, with two guys holding guns to each others' heads but nobody firing"{/xtypo_quote_left}

Kendrick Wilson, a former Goldman Sachs executive whom Paulson tapped last month as an adviser, helped lead the discussions, which ended without a specific plan, one of the people said. Bank of America Corp. CEO Kenneth Lewis didn't attend because his company is a potential bidder for Lehman, the person said.

Bank of America, the biggest U.S. consumer bank, and Barclays Plc, the U.K.'s third-biggest bank, are among the firms weighing acquisition of some or all of the 158-year-old investment bank after it reported its worst quarterly loss this week and the shares plummeted 77 percent in the past five days, according to people familiar with the situation who declined to be identified because the negotiations are confidential.