Federal Reserve Chairman Ben Bernanke said Monday the central bank would not have had a different view of Lehman Brothers had it known about controversial accounting tactics at the firm.
The firm used a technique called "Repo 105," which a court-appointed examiner questioned at length in a report on the firm's bankruptcy. The examiner said it was inappropriate that the firm did not disclose $50 billion worth of those transactions.
Bernanke said the central bank would not have acted differently had it known.
"Knowledge of Lehman's accounting for these transactions would not have materially altered the Federal Reserve's view of the condition of the firm; the information we obtained suggested that the capital and liquidity of the firm were seriously deficient," Bernanke said in prepared testimony to the House Financial Services Committee.
Lehman collapsed in 2008 and was not bailed out by the federal government. Congress later passed a $700 billion financial rescue package that allowed the government to invest capital directly into banks.
"No means of preventing Lehman's failure existed," Bernanke said.