In Maryland we have a lemon law — if you buy a new car and it turns out to have lots of defects then the dealer has to take it back. Should the same apply to banks? A federal judge will make that determination.
In September, Barclays bought Lehman Brothers investment banking and trading business — and it thought it had cherry-picked just the good assets. It turns out that due to a spreadsheet error, Barclays bought hundreds of not-so-good assets too. This PC World Article lays out the details. In November, a federal court will decide whether Barclays gets to return the bad assets.
In a normal acquisition most likely this error would have been caught, but in the rush of a fire sale, it didn’t. Would spreadsheet controls have helped prevent this error? Maybe — but doubtful in this case. The spreadsheet was too unique. However, in cases where spreadsheets are used repeatably for the same task, then a spreadsheet control strategy can help prevent costly errors.
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