Lehman's impact in the region
People in Nassau should be concerned about the collapse of Lehman Brothers in the United States.
Lehman Brothers had direct investments in the Bahamas as well as the island chain being the first port of call for American tourists seeking a quick Caribbean break.
James Smith is a former Central Bank Governor of the Bahamas.
He said that the credit fall-out in north America will have an impact in the Bahamas - the closest of Caribbean nations to the US.
"People's portfolios are shrinking and consequently less wealth and this may translate into reduction in travel demand," Smith told BBC Caribbean.
Smith said that less disposable income translates into an impact on the Caribbean.
"Anyone who depends on US tourism would be adversely affected," said Smith.
He predicts that the immediate impact will be a reduction in tourist numbers.
He said the the impact of the credict crunch had already led to reduced hours for some workers in the tourism sector in the Bahamas.
Smith said that the main lesson for the Caribbean is being too dependent on tourism as a revenue earner.
He sees these as cycles however and points to rises and falls in tourism numbers during past economic changes.
This particular cycle however is only just starting, predicted Smith.
"This is just the beginning, " he told BBC Caribbean.
"Because we are seeing the large institutions going under and, of course, when that happens, they're usually associated with any number of smaller ones."
The financial impact of the demise of Lehman Brothers is emerging as firms worldwide state their degree of exposure to the bankrupt firm.
Three Chinese banks have some $297.4m (£166.1m) in Lehman Brothers bonds, state media and local reports said.
Swiss Life said it had exposure of $20m Swiss francs (£9.9m) and Swiss Re had exposure of 50m Swiss francs.
German bank KfW transferred 300m euros (£237m) to Lehman after it collapsed on Monday, local media reported.
However, a spokesperson for KfW said the transfer had been done in error.
"There was an erroneous swap payment on Monday... for reasons for which are being investigated internally", the company told the Frankfurter Allgemeine Zeitung newspaper.
Lehman Brothers collapsed after seeing billions of dollars of losses in the US mortgage market.
Of China's exposure, Industrial & Commercial Bank said it owns Lehman bonds worth $151.8m, according to the Xinhua agency, while Bank of China has $75.6m in bonds and China Merchants Bank had $70m in Lehman bonds.
Meanwhile, UBS said on Tuesday that its exposure to Lehman Brothers was less than $300m.
But Japanese firms' total Lehman exposure was far greater at 440bn yen (£2.3bn), according to an earlier Kyodo news report.
Bank of Japan governor Masaaki Shirakawa that while Lehman's collapse would harm Japanese firms, those hit had enough funds to cover losses.
"I am not concerned that the recent events will destabilise the financial system in Japan," he said.
The news comes as UK bank Barclays has acquired certain core assets of Lehman Brothers for $1.75bn.
Barclays bought Lehman's North American investment banking and trading unit for $250m, and paid $1.5bn for its New York headquarters and two data centres.
The administrators, PricewaterhouseCoopers, said it had a keen interest in developments with Lehman Brothers in the US.
The administrator said that all UK employees at Lehman still attending work will be paid by the end of the month.
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