Council finance director cautious

COFFS Harbour City Council's new director of corporate business, Craig Milburn, will be keeping a close eye on developments on Wall Street following the collapse of US merchant bank Lehman Brothers.

The council has investments in collateralised debt obligations (CDOs) with Lehman Brothers which Mr Milburn says have a face value of $708,000.

Following the bank's application for bankruptcy on Monday, the value of the CDOs is unclear.

“Our only comment at this stage is that we are monitoring the situation and working with the appropriate people on it,” Mr Milburn said.

Australian councils are reported to have invested heavily in Lehman Brothers CDOs, as well as in those offered by other merchant banks, including Merrill Lynch, which was bought by Bank of America during this week's financial upheavals.

The New South Wales Opposition yesterday called on the Government to help councils, predicting some are headed for financial ruin.



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