Bloomberg reports that Lehman CEO Dick Fuld said in a memo to employees last week that 'our credibility has eroded. The current market environment is forcing us to take a number of measures to regain the confidence of all our constituents'.

Lehman will officially unveil its second-quarter earnings Monday (last week the firm said that was expecting to post a $2.8bn loss).

The news agency also points out that Lehman staff, which holds around 30% of the firm's equity, have lost $10bn due to the fall in Lehman's stock price from last year's high (and this despite Friday's recovery of some 14%). Fuld himself is thought to have sustained a paper loss of around $180m. (It could be worse, Dick. Bear Stearns Chairman Jim Cayne is thought to have suffered an actual loss of around $1bn when his firm was forced into into the arms of JPMorgan Chase).

Reuters reports that rating agency Moody's Investor Services has put Lehman on review for a possible downgrade. Moody's said in a statement: 'Although the objective of the (recent) management changes (the firm's CFO and COO were effectively demoted last week) appeared to be an effort to assure accountability for the losses and to strengthen risk and financial controls, the changes nonetheless may be an additional factor that could exacerbate erosion in investor confidence'.

In the meantime, BlackRock CEO Larry Fink has dismissed rumours that his firm is interested in acquiring Lehman. He said: 'We're in one business, and that's the asset management business. We were an investor in their bonds, in their equities, but in no way would we be a suitor'.

Putnam head of investments, Kevin Cronin, is, like Fink, bullish about Lehman's stock. Cronin told Bloomberg Friday: 'We're holders of all levels of their capital structure. The market has unfairly punished the price of their stock and bonds. We know they're going to be winners in the long run'.

Finally, The Wall Street Journal quotes from a research note put out last week by Sandford Bernstein analyst Brad Hintz. Hintz said: 'Lehman faces a difficult task. The firm is dealing with similar issues to when it first went public - the market doubts its ability to stay independent; the poor capital markets environment is bad for its business mix; many believe the firm will underperform its peers'.

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