The former head of Lehman Brothers has blamed regulators for the collapse of the Wall Street investment bank.

Dick Fuld said that Lehman was denied the help that regulators gave to other struggling banks. He told a commission examining the financial crisis that regulators rejected a series of measures that would have helped Lehman.

The firm filed for bankruptcy in September 2008, a move widely seen as aggravating the global crisis.

Mr Fuld was appearing before the Financial Crisis Inquiry Commission (FCIC).

The former Lehman chief executive, who has given evidence to the FCIC several times, said he proposed a package of measures that could have saved or allowed the orderly unwinding of the firm.

The collapse of Lehman Brothers was the key event during the financial crisis wiping billions off stock market values. The main question is why did it happen? Yes Lehman had problems but so did every other institution at the time. Two days before the US government spent $50 billion bailing out two mortgage brokers. The day after Lehman went under they spent $180 billion bailing out an insurance company. The Lehman rescue package would probably have cost $20 billion. With the dramatic reversal of what was left of Lehman’s last year, it is likely that most of these funds would have been paid back by now.

Indeed there is no valid reason why Lehman was allowed to go under. The Federal Reserve says that its liquidity was so bad that it could not be saved. However Lehman has always maintained this was not the case.

To me there is only one possible explanation. In the run up to the US Presidential Elections with the media constantly complaining about bank bailouts, the administration wanted to test the water and see what would actually happen if a Bank went under. Lehman was the smallest institution and therefore represented the least level of risk. The outcome was of course horrendous. The US tax payer ended up spending significantly more,as did European tax payers, than if they had simply given Lehman the same support issued to other banks such as Bear Stearns.