Lehman Brothers’ lead administrator has urged the government to think about the protection it affords to crippled banks, after the administration of the investment banking giant was held back as outstanding trades were left in limbo.

PricewaterhouseCooper’s partner Tony Lomas also called for banks to make a sweeping change to their disaster recovery protocols by thinking about the worst case scenario of their own collapses.

In the US, the Federal Reserve and the Securities and Exchange Commission moved to ring-fence Lehman Brothers International, allowing the American division to complete its outstanding trades, but no such move was taken by the Tripartite Authority in the UK.

Ring-fencing Lehman Brothers Europe’s outstanding trades would have made the start of the job, which is racking up bills of £4m a week, ‘an awful lot easier,’ Lomas told Accountancy Age.

With the protection thrown around the US arm, trades were completed, but they were ‘hung’ in Europe.

The European positions were frozen, which meant the administrators had tens of thousands of positions to close at the very start of the job.

He was not sure how much warning the Tripartite Authority would have had, but he added: ‘I’m sure [the Tripartite Authority] will reflect on how they will intervene and the impact they have.’

The moves frustrated the administrators’ attempts to make some headway with the task of calculating Lehman’s exact financial position, Lomas told journalists during the press conference following the creditors’ meeting last week.

Lomas said. ‘There was a lot of complexity created by that.’

The authority, which consists of the Treasury, the Financial Services Authority and the Bank of England, have individually come under fire already for not taking more prompt action during the banking crisis.

Lomas said banks should develop plans which cater for worst case scenarios.

The move would give insolvency practitioners a valuable head start in their efforts to unravel incredibly complex engagements like Lehman Brothers, he said.

‘I would recommend that banks like Lehman’s include in their disaster recovery plans some sort of procedure that can be adopted by incoming administrators,’ he told Accountancy Age.

Lomas is now preparing to meet the creditors committee before the end of the month at which the fees for PwC’s work will be set.

‘We’ve been working extremely hard for the last nine weeks and we will carry on working hard for the benefit of the creditors,’ Lomas said. But he warned that the team could face getting burnt out if they did not take a break over Christmas.

‘Fatigue will set in if the team does not take a rest,’ he added.

A source close to the Tripartite Authority said the body could only take similar action if the parent body had been regulated by the FSA.

However, if the UK market watchdog did monitor a troubled bank, the Special Provisions Act gave it power to do ‘pretty much whatever they felt necessary to ensure that financial stability was maintained.’