David Skeel
David Skeel - 
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Kai Ryssdal: For all the criticism that Ben Bernanke, Henry Paulson and Timothy Geithner have gotten for letting Lehman Brothers go under a year ago, their best line of defense is actually a pretty obvious one. We're not actually in another Great Depression now, are we? Former Treasury Secretary Paulson's book isn't due out for another couple of months. The current secretary and the Fed Chairman won't write theirs until they leave office.

But commentator David Skeel says the worst of Lehman's after-effects may be yet to come.

DAVID SKEEL: Letting Lehman go while propping up AIG and Citigroup was supposed to keep the market honest without letting the banking industry go down the tubes. A little tough love would teach the managers of our financial behemoths to be better citizens by making clear that they can't count on Uncle Sam to bail them out if they fail. No more wild risk taking or bank misbehavior.

But Wall Street may well be less honest after Lehman, not more.

Here's why. Before the crisis, the vast market in sophisticated financial contracts called derivatives was controlled by a few financial institutions, known on Wall Street as the "Fourteen Families." Scratch one of these contracts, and you could be sure that one of the families was the buyer, the seller, or both. If any of these giants collapsed, the whole house of cards might come down.

With Lehman gone, the little oligarchy of banks still dominates Wall Street, but the clique is a little bit smaller. This may be the worst possible outcome for the future of our financial markets. Worse even than bailing all every one of the banks out, or letting them all fail. If the whole system had gone down, we'd at least have the chance to rebuild a better one.

But with fewer giants, there is even less competition on Wall Street than before the crisis. The banks in the now smaller club are even more likely to do what monopolists always do: fight transparency and protect their own profits at the expense of small businesses and consumers. And with fewer, but much bigger giants, it will be even harder for regulators to avoid bailing any one of them out if it fails. No matter how badly their managers behave. Before the crisis, four or five of them were probably too big to fail. Now, they all are.

I never thought I would say that I miss Lehman. But as I look out on the new Wall Street landscape, same as the old one, except worse, I'm tempted to put a few flowers on Lehman's financial grave.

RYSSDAL: David Skeel is a professor of corporate law at the University of Pennsylvania.