Fuld says gov't denied Lehman while helping Wall St

US regulators did not grant Lehman Brothers the same assistance as its competitors, knocking out the possibility of an orderly unwind of the firm and aggravating the global crisis, former Lehman Chief Executive Dick Fuld said on Wednesday.

Fuld will tell a US commission investigating the causes of the financial crisis that Lehman proposed to government regulators a menu of options that could have given the investment bank relief and possibly averted its September 2008 collapse

Regulators rejected these options-including allowing Lehman to become a bank holding company-but weeks later extended the measures for other Wall Street firms, Fuld said in testimony prepared for the Financial Crisis Inquiry Commission.

Fuld focused on Sunday, September 14, 2008, when he said Lehman was mandated by government regulators to file for bankruptcy before the Asian markets opened the next day.

That same Sunday, the Fed expanded for investment banks the types of collateral that would qualify for borrowings from its discount window, Fuld said.

"Only Lehman was denied that expanded access. I submit, that had Lehman been granted that same access as its competitors, even as late as that Sunday evening, Lehman would have had time for at least an orderly wind down or for an acquisition which would have alleviated the crisis that ensued," Fuld said.

Fuld has testified multiple times in Washington since Lehman filed for bankruptcy on September 15, 2008, touching off a new level of the financial crisis during which credit markets virtually froze.

He is testifying before the Financial Crisis Inquiry Commission, a 10-member congressionally appointed panel, during a two-day hearing exploring "too big to fail"-the concept that some firms are so important to the financial system that they enjoy implicit government backing.

The FCIC is using the collapse of Lehman Brothers and the government-brokered sale of Wachovia to Wells Fargo as case studies.

Also testifying on Wednesday are Robert Steel, a former Treasury official who became CEO of Wachovia in July 2008; Thomas Baxter, general counsel of the Federal Reserve Bank of New York; and JPMorgan Chase Chief Risk Officer Barry Zubrow.

On Thursday the FCIC will hear from Fed Chairman Ben Bernanke and Federal Deposit Insurance Corp (FDIC) Chairman Sheila Bair.