Bank of America could partner with financial investor JC Flowers and a Chinese sovereign wealth fund on a bid to rescue Lehman Brothers, the Financial Times reports. The hobbled investment bank had resisted selling itself, but is now eagerly seeking suitors before the last of its goodwill on Wall Street dries up.
“The only question now is what price,” said an insider. Treasury Secretary Henry Paulson has left no doubt that Washington will not inject any government funds into a Lehman sale, which could create losses for debt holders. The firm’s downfall may also cause trouble for the Securities and Exchange Commission, which many blame for allowing the bank’s finances to spiral out of control.