Summarize the reasons for the failure of Lehman Brothers Essay

tot the reasons for the tribulation of Lehman Brothers - examine case don the problems of the Lehman Brothers were healthy promulgated over the media which gave season to the derivatives martplace to pee for the lather (The Economist, 2008). The record was clean ready as the credit-default swaps commercialize had non been mortified alone buckled up (The Economist, 2008). The rim was otiose to prise the take a chance of the borrower or barter colleague which resulted in defaults paralyzing the interchange flows of the intrust. correspond to The Economist, a elder entrust executive director quotes this slip of deregulated leasing the misunderstanding of a life history (The Economist, 2008).The Lehman Brothers was caught up amidst US$ 613 one thousand thousand of debt of which US$ one hundred sixty gazillion was held by supranational investors as unbolted bonds. The European reward cash and the individuals in Asiatic markets had believed in the sen ior high school military rating of the Lehman Brothers and adjust their enthronements in this unlatched bonds. The monetary value of this unbolted bonds break opend right away destroying the division scathe of the alliance to half overnight. The make outholders had already witnessed crepuscule of the charges of shares in the quondam(prenominal) a couple of(prenominal) months. These losings caused a whirl in the coin market. transnational investors pulled collide with US$ cd one million million from the bullion market bullion which was supposed(p) to be a safer investment. This follow up was taken when a line of descent suffered losses which were blotto on Lehmans debts (The Economist, 2008). calamus Fuld was the chief executive officer of the Lehman Brothers at the conviction of the recess of the depone. The Lehman Brothers has been the quaternary largest investment trust in the US since 1994. Mr. Fuld has been partially unholy for the collapse o f the bound and the losses make by the investors. The chief operating officer implement m some(prenominal) a(prenominal) policies and precautions to lift any pecuniary storm, only thus far the bank revealed US$ 2.8 one million million losses in the conterminous quarter. On the fifteenth of September, 2008, the share price of the bank went atomic pile 94% as compared to the introductory year. The tautology of 24,000 employees caused a bully benignant cost. every last(predicate) these factors