Feds, Banks Seek Lehman Deal by Tonight

Washington and Wall Street continued talks today aimed at solving the Lehman Brothers crisis as early as tonight, the Wall Street Journal reports. Federal Reserve officials still refuse to approve a bailout like the one that enabled JP Morgan to acquire Bear Stearns this summer—but possible buyers like Bank of America and Barclays are balking at Lehman's bad assets, which have so far hindered a deal.

Expanded lending, established after the Bear debacle, is still available to Lehman, but “the intended purpose of Federal Reserve lending is to provide liquidity to sound institutions,” Ben Bernanke said. "The financing that we did for Bear Stearns is a one-time event that has never happened before, and I hope it never happens again." (More Lehman Brothers stories.)