Downfall of Lehman Brothers
Chapter: 3, Foundations of Decision Making
The Downfall of Lehman Brothers
The Downfall of Lehman Brothers
Poor Decision making is a factor that can lead to bankruptcy and failure. Lehman Brothers Holdings Inc., a major U.S investment bank, is an example of bad decision making because of their poor judgment, they have filed a Chapter 11 bankruptcy protection on September 15, 2008. A Chapter 11 bankruptcy protection is when a company, in this case Lehman Brother Holdings Inc. , reports to the government that they are bankrupt and they need to be financially supported by the federal reserves in form of bailout. It was followed by the massive exodus of most of its clients, drastic losses in its stock, and devaluation of its assets by credit rating agencies. The government soon realised the critical situation and decided not to proceed with the bailout, therefore they organized an emergency meeting of CEOs of other banks to deal with this urgent situation. They did not find solution and therefore this financial giant went bankrupt.
Lehman Brothers Holdings Inc. was a global financial services firm which, participated in business in investment banking, equity and fixed-income sales, research and trading, investment management, private equity, and private banking. It was a primary dealer in the U.S. Treasury securities market. It was the fourth largest of the Wall Street investment banks and the oldest one. It had survived repeated financial panics around the turn of the 19th century and thrived during the Great Depression. It had over $600 billion of assets and vast, untanglable trading relationships with every other major bank and firm in finance all over the world. Lehman Brothers, with its main headquarters in New York City, had 25,000 staff around the world, 4,500 at Europe in Canary Wharf office building in London. It was, as many experts agreed, too big to fail. The Decision Making Process is the most important in order to create a
The Downfall of Lehman Brothers
The Downfall of Lehman Brothers
Poor Decision making is a factor that can lead to bankruptcy and failure. Lehman Brothers Holdings Inc., a major U.S investment bank, is an example of bad decision making because of their poor judgment, they have filed a Chapter 11 bankruptcy protection on September 15, 2008. A Chapter 11 bankruptcy protection is when a company, in this case Lehman Brother Holdings Inc. , reports to the government that they are bankrupt and they need to be financially supported by the federal reserves in form of bailout. It was followed by the massive exodus of most of its clients, drastic losses in its stock, and devaluation of its assets by credit rating agencies. The government soon realised the critical situation and decided not to proceed with the bailout, therefore they organized an emergency meeting of CEOs of other banks to deal with this urgent situation. They did not find solution and therefore this financial giant went bankrupt.
Lehman Brothers Holdings Inc. was a global financial services firm which, participated in business in investment banking, equity and fixed-income sales, research and trading, investment management, private equity, and private banking. It was a primary dealer in the U.S. Treasury securities market. It was the fourth largest of the Wall Street investment banks and the oldest one. It had survived repeated financial panics around the turn of the 19th century and thrived during the Great Depression. It had over $600 billion of assets and vast, untanglable trading relationships with every other major bank and firm in finance all over the world. Lehman Brothers, with its main headquarters in New York City, had 25,000 staff around the world, 4,500 at Europe in Canary Wharf office building in London. It was, as many experts agreed, too big to fail. The Decision Making Process is the most important in order to create a