Lehman Brothers shut down its carbon emissions trading desk after the bank filed for bankruptcy protection, a source close to the company told Reuters on Monday.
"Everything's stopped, blocked ... it's a bit anarchic," he said.
Lehman declined to comment on the matter.
The U.S. investment bank filed for Chapter 11 protection on Monday while Merrill Lynch, also plagued by toxic, mortgage-related debt, agreed to be bought by Bank of America. Merrill's carbon desk was open as usual on Monday, a source familiar with the bank said.
Lehman's membership on the IntercontinentalExchange, which includes access to the European Climate Exchange, the world's largest emissions trading exchange, was suspended, an ICE spokesman said.
This effectively disallows Lehman from closing any open positions on its trading books.
LCH.Clearnet, which handles clearing for ICE, also restricted Lehman's trading, citing the company as a "defaulter", the clearing house said in a statement.
"Lehman's were relatively small, they were late coming into the (emissions) market," one London-based broker said, adding that Lehman is thought to have been more involved in the Clean Development Mechanism (CDM) market than in day-to-day trading. Continued...
Tuesday, September 16, 2008
Posted by climateer at 1:20 PM