In an extraordinary public autopsy into the biggest bankruptcy in US history, Mr Fuld declared that he felt “horrible” about what had happened to the venerable investment bank, but insisted Lehman was brought down by a crisis in confidence in the marketplace, combined with a plague of naked short selling.

By blaming the short sellers, Mr Fuld echoed the testimony of a fellow victim of the credit crisis earlier this year. Alan Schwartz, former chief executive of Bear Stearns, told a Senate committee in April short sellers had helped create a run on the bank, which sapped Bear Stearns' liquidity and eventually forced it into a shotgun marriage to JPMorgan Chase.

“We believed we were well- protected to withstand even the most difficult markets. What we have seen recently in the international credit markets has overwhelmed many financial institutions and threatened all financial institutions,” Mr Fuld said in written testimony offered to reporters before the hearing began. “We did everything we could to protect the firm.”