Bernanke: Fed didn’t know Lehman used accounting gimmick to mask debt

Fed boss didn’t know Lehman masked its debt

WASHINGTON — Federal Reserve Chairman Ben Bernanke says the Fed wasn’t aware that now-defunct Lehman Brothers used an accounting gimmick to mask billions in debt in the run-up to the 2008 financial crisis.

Bernanke, in prepared remarks to a House committee, says even if it did, the information wouldn’t have changed the Fed’s view that the investment firm was in bad financial shape.

The remarks were released Monday in advance of Tuesday’s hearing.

Although Securities and Exchange Commission was Lehman’s chief regulator, the Fed did begin to monitoring the firm as financial stresses heightened.