World on collision course for Lehmans 2.0?

Four years after Lehman Brothers suffered the largest bankruptcy in US history, a former vice president at the investment bank has warned the financial system is on a ‘collision course' for another 2008-style event.

Lawrence McDonald is a former proprietary trader who ran a $1bn portfolio for the bank, and author of the book A Colossal Failure of Common Sense: The inside story of the collapse of Lehman Brothers. He expects Spain will be the next domino to fall on the world stage due to the excessive leverage in its economy and in the European banking sector, triggering a huge sell-off in financial markets.  Lehmans was leveraged up as much as 40 times before the crisis, and while European banks may not be at those levels, they are three times more leveraged than the US relative to GDP, McDonald s...