The former deputy head of the Bank of England today said he was "astounded" that the US government did not step in to halt the collapse of Lehman Brothers 12 months ago.
On the one-year anniversary of the fall of Lehmans which has come to mark the beginning of the financial crisis, John Gieve said he had expected government money to be pumped in to rescue the stricken investment bank.
"I thought from the start that they would do what they had done with Bear Stearns which was to put government money in to ensure that a rescue happened," Gieve said in an interview with Sky News.
"And by doing that they'd created a presumption, not just in the UK but right across financial markets, that the safety net had now been widened and now stood behind the big investment banks as well as the commercial banks.
"So having created that presumption, dashing it to pieces was devastating."
He added: "I think letting Lehmans go really raised the question, did the US have a grip on this thing?"
Asked if he was surprised that the US government had not stepped in, he replied: "I was astounded.
But he also praised steps taken to halt the global financial meltdown which followed the collapse.
The collapse of Lehmans was followed by months of world economic panic and seesawing markets, heralding an era when companies began turning to governments for aid.
