The idea that the Federal Reserve could have saved Lehman Brothers through more generous use of emergency lending amounts to “magical thinking”, according to former Treasury secretary Tim Geithner.

“I have not seen the credible case that lending up to the value, even generously determined, of available collateral, for a bleeding business, with its assets underwater, would have been effective,” said Geithner, who was one of the key US actors during the 2008 financial crisis.

Much debate since