Lehman nemesis Einhorn warns financial system still flawed

BANK SYSTEM STILL FLAWED

David Einhorn, the US hedge fund manager who publicly questioned the health of Lehman Brothers long before its collapse, has warned investors the financial system still has a number of major flaws.

Einhorn, who has guided his Greenlight Capital to a 21% annualised return since its inception in 1996, is calling on the abolition of credit rating agencies which failed so spectacularly during the crisis. In a rare interview, Einhorn told Consuelo Mack's WealthTrack the financial watchdogs are allowing much of the same behaviour which created the credit crisis. "We shouldn't have credit rating agencies in any form. Even in their best, they add to cyclical pressures. They say positive things when things are good, that restores confidence; and then when things start getting into a cris...