Three banks have 45% of the counterpartyexposure, Citigroup, UBS and Merrill Lynch, making the chances of a banking industrywide rescue remote, even bank executives acknowledge.
Speculation about whether the Fed will keep the window open has only exacerbated concerns about the counterpartyexposure of the big brokers and can perhaps explain the skittishness over Lehman Monday.
But the fear then was that if the bailout wasn't arranged, a collapse of Long-Term Capital would ripple through the global banking system, which had major exposure as a counterparty to those highly leveraged bets.