The document provides an overview of the collapse of Lehman Brothers during the subprime crisis. It begins with an introduction and literature review on analyses of the collapse from various perspectives, such as the process, reasons, impacts, and lessons learned. It then briefly describes the circumstances leading up to Lehman Brothers' bankruptcy, including their aggressive financial strategies and high exposure to subprime mortgage products. The document concludes with a critical analysis of reasons for the collapse, including macroeconomic factors, Lehman Brothers' corporate strategies and risk management failures, and lack of effective government supervision.
Group Presentation on the events surrounding Lehman Brothers. An insight into the rules of corporate governance rules and bailout comparison between USA and UK.
Short presentation on fall of the 4th biggest investment bank firm in United States during the period of financial crisis in 2008 which ultimately started recession in Unites States Of America and subsequent impact on whole world of economy.
Lehman Brothers was the largest bankruptcy in the history of United states.It was the the fourth biggest investment bank in United States until it filed for the bankruptcy in September 2008.The size of the bankruptcy was as much as the five subsequently largest bankruptcies combined and more than one and a half time the gross domestic product of Sweden in 2009.
Corporate Governance Reforms Post Global Financial CrisisSanjay Uppal
Every financial crisis is typically followed by introduction of new regulations. However, the avalanche of new policies, guidance & regulations in recent years following the onset of the financial crisis will lead to unprecedented transformation in the governance of banks and financial services organizations.
The presentation analyses key events leading up to this crisis, changes in corporate governance sweeping across, US, UK & Europe and the challeges that organiations, regulators, governments and other stakeholder face in this period of transformation.
Group Presentation on the events surrounding Lehman Brothers. An insight into the rules of corporate governance rules and bailout comparison between USA and UK.
Short presentation on fall of the 4th biggest investment bank firm in United States during the period of financial crisis in 2008 which ultimately started recession in Unites States Of America and subsequent impact on whole world of economy.
Lehman Brothers was the largest bankruptcy in the history of United states.It was the the fourth biggest investment bank in United States until it filed for the bankruptcy in September 2008.The size of the bankruptcy was as much as the five subsequently largest bankruptcies combined and more than one and a half time the gross domestic product of Sweden in 2009.
Corporate Governance Reforms Post Global Financial CrisisSanjay Uppal
Every financial crisis is typically followed by introduction of new regulations. However, the avalanche of new policies, guidance & regulations in recent years following the onset of the financial crisis will lead to unprecedented transformation in the governance of banks and financial services organizations.
The presentation analyses key events leading up to this crisis, changes in corporate governance sweeping across, US, UK & Europe and the challeges that organiations, regulators, governments and other stakeholder face in this period of transformation.
This is a quick analysis of how WorldCom fraud was discovered and what exactly did WorldCom do to keep the E/R ratio in tact. E/R ratio was the major parameter of performance in the telecom business which the WorldCom was in. It used two major accounting concepts in a wrong manner to fudge the numbers.
This is a quick analysis of how WorldCom fraud was discovered and what exactly did WorldCom do to keep the E/R ratio in tact. E/R ratio was the major parameter of performance in the telecom business which the WorldCom was in. It used two major accounting concepts in a wrong manner to fudge the numbers.
Board of Directors: A Guide to Understanding Concepts of Corporate Governance, By David F. Larcker, Brian Tayan
Core Concepts Series. Corporate Governance Research Initiative, August 2016
A roadmap to understanding the fundamental concepts of corporate governance based on theory, empirical research, and data. This guide will take an in-depth look at Board of Directors.
1Running Head LITERATURE REVIEW FOE LEHMAN BROTHERS’ BANKRUPTCY.docxdrennanmicah
1
Running Head: LITERATURE REVIEW FOE LEHMAN BROTHERS’ BANKRUPTCY PAPER
2
LITERATURE REVIEW FOR LEHMAN BROTHERS’ BANKRUPTCY PAPER
Lehman Brothers Bankruptcy
Article 1: The Lehman Brothers Effect and Bankruptcy Cascades.
The article talks about the effects of the bankruptcy of the Lehman Brothers and the consequences that it had on the global financial system. Then, it will take effect to develop a simple model that initiates the Lehman failure event is quantified that will have an immediate effect on the worsening of the creditworthiness of all financial institutions in the economic network. This article has proven that the process to bail out of a company that defaults is not always a solution but it will help in mitigating the effects of global impact, and this will be determined by measuring the part of the company that has not defaulted as a result (Sieczka, Sornette & Holyst, 2011). Also, the article describes the existence of phase transitions, which are between the paramagnetic and the ferromagnetic stages to describe the sensitivity of the system to any form of negative impact. The beneficial effect as described in the article is a counterpart of the large vulnerability of the system of coupled firms. I find this article to be very informative of the consequences of the Lehman Brothers bankruptcy, and it also provides crucial information on the possible alleviation of future crises that are related to the one described.
Article 2: Hedge Funds as Liquidity Providers
The article uses the case of Lehman bankruptcy to pass across the information. Hedge funds that were using the Lehman brothers as their prime broker prior to the bankruptcy faced a decline in funding liquidity after the bankruptcy in the year 2008. This is one of the main consequences that can be associated with the bankruptcy. The stocks that were held by the funds connected to Lehman experienced greater declines in the market liquidity in comparison to other stocks after the bankruptcy was declared. The effect of decline was even greater for the ex-ante illiquid stocks, and this seemed to persist into the start of the year 2009. However, no similar effects were noted with the Bear Stearns Failure according to the article, and this is suggestive that the disruption that is associated with bankruptcy can be used in the explanation of liquidity effects. From the article, the conclusion that can be made is that the shocks that funding liquidity of traders usually experience helps in the reduction of the market liquidity of the assets that they trade in. The article is well formulated and it explains the consequence of the Lehman bankruptcy to the hedge funds. The authors have properly explained the situation associated with the hedge funds, making this article to be very helpful.
Article 3: International Shock Transmission after the Lehman Brothers Collapse: Evidence from Syndicated Lendi.
Running head LITERATURE REVIEW FOR LEHMAN BROTHERS’ BANKRUPTCY PA.docxwlynn1
Running head: LITERATURE REVIEW FOR LEHMAN BROTHERS’ BANKRUPTCY PAPER
LITERATURE REVIEW FOR LEHMAN BROTHERS’ BANKRUPTCY PAPER
Lehman Brothers bankruptcy
Article#1: The failure of Lehman Brothers and its impact on other financial institutions.
The article interested in Dow Jones Industrial Average (DJIA) in the Lehman Brothers crisis by using the specific dates such as the day that Lehman Brothers announced their first quarterly loss until the day that Lehman Brothers filed for bankruptcy. In 2008, the failure of Lehman Brothers impacted not only the large primary bank but also savings, loans, and brokerage firm (Mark & Abdullah, 2012). This article traces the 3 years of daily stock return from the beginning of the year 2006 till the end of the year 2008 by forming the portfolio based on the firms’ Standard Industrial Code (SIC) and also the portfolio of the publicly traded financial institutions which had primary dealer status according to the New York Federal Reserve list on 15 September 2006. This article compares the effect of differences formed portfolio in the many event dates. The results show that in four differences event date, the portfolio is increasing and decreasing depending on the news. If the news is in a positive way such as the day that Korean Development Bank (KDB) announced that it was having a discussion with Lehman brothers regarding a possible investment in their firm, the portfolio is increasing and vice versa. I find the study and hypothesis of this article are very informative for learning of the fluctuation of the stock.
Article#2: Derivatives in bankruptcy: some reasons from Lehman Brothers.
The article talks about the beginning of the crisis, how the Lehman Brothers and other organization such as government cope with the problems, and also what is the effect of the action. Anyway, most of the article talks about the mechanism of derivatives. The resolution of the Lehman’ derivative contracts can classify in three types.First, most counterparties selected to terminate the contract as soon as possible after Lehman’s bankruptcy filing because holding the opening contracts could be a lose-lose situation. Second, some counterparties chose neither to terminate nor to continue making payments. Third, some counterparties who have lost their money on the contracts are trying to avoid paying the full value of their obligation. From this article, the effect is not staying only for Lehman brothers but it widespread to other company. At that time, the government attempted to curb the run on money market funds because the numerous investors withdrew their investment, fearing of loss in the money which relating to Lehman Brothers insolvency. The Lehman Brothers’ crisis teaches a lot of lessons for not only the investors but also the financial institution. Sometimes government support has been vital in keeping the market for structured securities alive (Henry, 2010).
Article#3 The impact of large-scale asset purchases on the.
Ivo Pezzuto - Predictable and Avoidable: What's Next?Dr. Ivo Pezzuto
Abstract:
The author of this paper (Dr. Ivo Pezzuto) has been one of the first authors to write back in 2008 about the alleged "subprime mortgage loans fraud" which has triggered the 2008 financial crisis, in combination with multiple other complex, highly interrelated, and concurrent factors.
The author has been also one of the first authors to report in that same working paper of 2008 (available on SSRN and titled "Miraculous Financial Engineering or Toxic Finance? The Genesis of the U.S. Subprime Mortgage Loans Crisis and its Consequences on the Global Financial Markets and Real Economy") the high probability of a Eurozone debt crisis, due to a number of unsolved structural macroeconomic problems, the lack of a single crisis resolution scheme, current account imbalances, and in some countries, housing bubbles/high private debt.
In the book published in 2013 and titled "Predictable and Avoidable: Repairing Economic Dislocation and Preventing the Recurrence of Crisis", Dr. Ivo Pezzuto has exposed the root causes of the financial crisis in order to enables readers to understand that the crisis we have seen was predictable and should have been avoidable, and that a recurrence can be avoided, if lessons are learned and the right action taken.
Almost one year after the publication of the book "Predictable and Avoidable: Repairing Economic Dislocation and Preventing the Recurrence of Crisis", the author has decided to write this working paper to explore what happened in the meantime to the financial markets and to the financial regulation implementation.
Most of all, the author with this working paper aims to provide an updated analysis as strategist and scenario analyst on the topics addressed in the book "Predictable and Avoidable" based on a forward-looking perspective and on potential "tail risk" scenarios. The topics reported in this paper relate to financial crises; Government policy; financial regulation; corporate governance; credit risk management; financial risk management; economic policy; Euro Zone debt crisis; the "Great Recession"; business ethics; sociology, finance and financial markets.
This working paper aims to contribute to the debate about the change needed in the banking and finance industries and to supervisory frameworks, in order to enhance regulatory mechanisms and to improve global financial stability and sustainability.
Conclusion: This paper aims to demonstrate that, in spite of the artificially reduced volatility in the markets, systemic risks have not been reduced after the global financial crisis and that, currently (September 2014), adverse scenarios seem to be much more likely than previously expected by regulators and supervisory authorities, due to the prolonged massive accommodative monetary policies, the increased economic and geo-political risks, and some incomplete or unfit financial regulation. Thus, the stress testing models, their underlying assumptions, and the supervisory aut
1 The Impact of Government Intervention in Banks on Corp.docxdorishigh
1
The Impact of Government Intervention in Banks on Corporate Borrowers’
Stock Returns
Lars Norden, Peter Roosenboom, and Teng Wang
*
Abstract
Moving into and out of a financial and banking crisis is likely to be associated with spillover
effects from the banking sector to the corporate sector. We investigate whether and how
government interventions in the U.S. banking sector influence the stock market performance
of corporate borrowers during the global financial crisis of 2007-2009. We measure firms’
exposures to government interventions with an intervention score that is based on combined
information on the firms’ structure of bank relationships and their banks’ participation in
government capital support programs. We find that government capital infusions in banks
have a significantly positive and economically meaningful impact on borrowing firms’ stock
returns. The effect is more pronounced for smaller, riskier, and bank-dependent firms. Our
study highlights positive effects from government interventions during the crisis,
documenting that an alleviation of financial shocks to banks has led to significantly positive
valuation effects in the corporate sector.
Key words: Bank loans, Bank-firm relationships, Stock markets, Banking crisis, Government
intervention.
JEL classification: G10, G21, G28, G32.
Rotterdam School of Management, Erasmus University, Burgemeester Oudlaan 50, 3062 PA Rotterdam, the
Netherlands.
Contacting author: Tel. +31 10 4082807; Fax: +31 10 4089017; E-mail: [email protected] (Lars Norden).
2
I. Introduction
Financial and banking crises have a significantly negative impact on the corporate sector,
resulting in a lower stock market valuation of borrowing firms and a subsequent decrease in
aggregate economic activity. However, little is known empirically about the existence and
nature of spillover effects that might arise from a removal or mitigation of shocks to the
financial and banking system to the corporate sector. Do stock prices of corporate borrowers
react to rescue measures for banks? If yes, what are the direction, magnitude and speed of the
reaction? Which firms exhibit the strongest stock market reaction? To shed light on these
questions, we investigate whether and how government interventions in the U.S. banking
sector influence the stock returns of corporate borrowers during the global financial crisis of
2007-2009.
Previous crises, such as the Japanese, the Russian, the Asian, and the recent global
financial crisis have not only adversely affected the financial system but also the real
economy in many countries through a tightening of bank lending (e.g., Chava and
Purnanandam (2011), Campello et al. (2010), Carvalho et al. (2010), Giannetti and Simonov
(2010), Ivashina and Scharfstein (2010), and Lemmon and Roberts (2010)). Related studies
document a sharp drop in banks’ lending to the corporate sector during ...
FINAL TAKE-HOME ASSIGNMENTThe final take home has 2 parts, 2 equ.docxAKHIL969626
FINAL TAKE-HOME ASSIGNMENT
The final take home has 2 parts, 2 equally weighted critical thinking essays on moral hazard and socially responsible finance.
Moral Hazard Critical Thinking Essay Assignment
The prompt
The term “moral hazard” has been in the news over the past few years. What does this mean? Why is it a concern to many financial institution and market observers? What role, if any, did it play in the financial crisis of the last decade? What, if anything, do you think should be done about it?
Your essay should be 2 pages (approximately 500 words).
Content Grade Rubric
Student:
Prompt
4
3
2
1
0
Score
What does the term “moral hazard” mean?
Fully defined
Partially defined
Incorrectly defined
Not answered
Why is it a concern to many financial institution and market observers?
Fully explained
Partially explained
Incorrectly explained
What role, if any, did it play in the financial crisis of the last decade?
Fully explained
Partially explained
Incorrectly explained
What, if anything, do you think should be done about it?
Thoughtful, complete answer
Partial answer
Inappropriate answer
Socially Responsible Finance Critical Thinking Essay Assignment
The prompt
In recent years, there has been a growing debate around “socially responsible finance”. Demand for opportunities labelled as “socially responsible investments” (SRI) has increased, behavioral finance and institutional “nudging” are receiving more attention, and corporate governance of institutions is broadly discussed. Overall, potential returns as well as conflicts of interest, environmental and social impact are more closely scrutinized. What are the origins of this movement? What role do you think knowledge about behavioral finance and SRIs should play in future personal and professional decisions?
The details
Your essay should be 2 pages (approximately 500 words).
Student:
Prompt
4
3
2
1
0
Score
What are the origins of SRI? How does it work in practice?
Fully explained
Partially explained
Incorrectly explained
Not answered
What is the evidence to date about whether SRI investments outperform or underperform non-SRI investments?
Fully explained
Partially explained
Incorrectly explained
What is the origin of behavioral finance? In which decisions can be found?
Fully explained with citations
Partially explained/no citations
Incorrectly explained
Is there evidence of institutional “nudging” benefiting main street?
Thoughtful, complete answer
Partial answer
Inappropriate answer
How do you think reading about behavioral finance and SRIs will affect future personal and professional decisions?
Thoughtful, complete answer
Partial answer
Inappropriate answer
Sheet1LMH10090H80M70L605040302010NumberRisk NameFull Risk CostRisk ProbabilityFactored Risk costRisk Impact to ProjectRisk Mitigation PlanPoint of ContactExpected Risk Retire date1$20,00020%$4,000L2$03$04$05$06$07$08$09$010$0$0$0
10
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2
3
4
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8
9
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Sheet2
Sheet3
Oral Testimony of
...
Studio sulla capacità del modello predittivo del fallimenti Altman Z-Score ne...Giuseppe Fumagalli
An Overlook at Bankruptcy Prediction in Italy in 2016: An Application of the Altman’s Model on Failed Italian Manufacturing Companies In The 2016-First Quarter
ISSN 2029-9370 (Print), ISSN 2351-6542 (Online). Regional FoRmation and development StudieS, no. 2 (19)
7
L e v e r a g e C o n t r o L a n d Q u a n t i t a t i v e
M a n a g e M e n t : t h e a n a L y s i s o f a M p L i f i C a t i o n
e f f e C t o n f i n a n C i a L s y s t e M
Haidong Feng1, Kaspars Viksne2, Andrea Lunardi3
University of Latvia (Latvia)1,2, University of Verona (Italy)3
ABSTRACT
Maintaining the stability of financial leverage is a task in macro-economic management and also a challenge to be faced. Financial
amplification characteristics dominate financial leverage system with low risk of capabilities, and the efficiency of this ability has
two-sides results and proposes a lot of risks, however, most researchers have not found the best ways to solve this problem. There-
fore, taking positive measures to strengthen the management of the financial system leverage feature becomes very important. In
this paper, authors use comparative study and data analysis to illustrate the main problems of financial system leverage, the effect of
leverage amplification characteristics, bi-amplified comparative analysis of profit and loss, and bi-amplification characteristics of the
risk analysis. Meanwhile, based on five classified management methods, authors put forward countermeasures to the management
of leverage properties in financial system.
KEYWORDS: Financial System, Leverage Characteristic, Leverage Category Management.
JEL CODE: G10
DOI: http://dx.doi.org/10.15181/rfds.v19i2.1279
I n t r o d u c t i o n
Contemporary evolution of the financial system in the outstanding performance, that first developed rap-
idly, is mixed. This situation is largely due to its real economic leverage amplification characteristics. It is the
leverage performance of the financial system, so it has a small risk of capacity, particularly under the effect
of high leverage efforts that people often anticipate. Two financial derivatives, for example, under ordinary
circumstances investors only need to pay a small deposit that can carry a huge amount of the transactions.
Primarily, it can make the money work more efficiently and avoid risks to achieve hedge of gaining huge
profit. Furthermore, the financial derivative transactions or probability also contain a huge risk of losing oc-
curs when the amount of loss is correspondingly expanded several times, and its ripple effect will be spread
like butterfly effect, and it will be difficult to control it. One of the reasons of the global financial crisis is that
five largest investment banks of U.S bankrupted at the same time.
In the current years, financial leverage plays an important role in the financial system. Also financial
leverage must be used appropriately to get far away from the crisis. Both macroeconomic regulators and
1 Haidong Feng – University of Latvia, MsC. Scientific intrests: Marketing
E-mail: [email protected]zu.edu.cn
Tel. +371 253 367 87
2 Kas ...
The Influencing Factors of Chinese Corporations’ LeverageIJAEMSJORNAL
Faced with the pressure of economic downturn and structural transformation, high debt leverage has become a prominent problem of China's economic development. This article takes 2007-2018 annual data of non-financial companies listed on A-shares as an example, analyzes the influencing factors of Chinese corporations’ leverage, the empirical results find that macroeconomic environment have a significant impact on corporate debt leverage ratio, and sufficient liquidity is conducive to increasing the willingness of enterprises to expand reproduction and has a positive impact on corporate debt leverage. Financial market factors have a significant impact on corporate debt leverage ratios, the greater the financial institution's support for the real economy, the stronger the company's ability to obtain debt financing. The operation indicators of enterprises have a significant impact on the corporate debt leverage ratios, profitability and leverage ratios have a negative correlation, and this negative correlation is the most significant of all influencing factors.
Week 3 - Discussion Forum 2Required ResourcesTextsGwartneynicolleszkyj
Week 3 - Discussion Forum 2
Required Resources
Texts
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018). Macroeconomics: Private and public choice (16th ed.). Retrieved from https://www.cengage.com
· Chapter 9: An Introduction to Basic Macroeconomic Markets
· Chapter 10: Dynamic Change, Economic Fluctuations, and the AD-AS Model
· Chapter 11: Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics
· Chapter 12: Fiscal Policy, Incentives, and Secondary Effects
Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach you about economics. Retrieved from https://www.redshelf.com
· Chapter 4: It’s the Spending, Stupid: Budget Deficits Really Don’t Matter
· Chapter 22: If They Tell You They Predicted the “Financial Crisis,” They’re Lying
Recommended Resources
Text
Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach you about economics. Retrieved from https://www.redshelf.com
· These chapters provide John Tamny’s perspective on a specific fiscal policy: taxes. The author and some other economists are not in favor of higher taxes. He gives the rationale for the government to implement a fiscal policy of lower taxes. This may give you a different perspective and add to your knowledge in answering the Fiscal Policy discussion forum question as well as give more information in working through The Great Recession of 2008-2009: Causes and Responses assignment this week.
· Chapter 1: Taxes are Nothing More than a Price Placed on Work
· Chapter 2: When We Tax Corporations, We Rob Them of Their Future
· Chapter 10: Conclusion: Bulldoze the U.S. Tax Code
Articles
Colvin, G. (2018, October 1). How to spot the next financial crisis. Fortune, 9–10. Retrieved from http://fortune.com/
· The full-text version of this article is available through the EBSCOhost database in the Ashford University Library. This article reflects on some of the causes of the Great Recession. More importantly, the author takes you into the future to discuss when and if another big recession will occur and what some of the triggers might look like. This article may assist you with your The Great Recession of 2008-2009: Causes and Responses assignment this week.
Committee for a Responsible Federal Budget. (2018, December 13). The deficit has never been this high when the economy was this strong (Links to an external site.) [Blog post]. Retrieved from http://www.crfb.org/blogs/deficit-has-never-been-high-when-economy-was-strong
· This blog post discusses the current debt high level in relation to business cycles. The debt is climbing in a very healthy economy which is unusual as debt usually grows during down economies and recessions. This is an interesting perspective and may assist you with your Government Budget Deficits (Debate) discussion forum this week.
Accessibility Statement does not exist.
Privacy Policy (Links to an external site.)
C ...
Week 3 - Discussion Forum 1Required ResourcesTextsGwartney.docxjessiehampson
Week 3 - Discussion Forum 1
Required Resources
Texts
Gwartney, J. A., Stroup, R. L., Sobel, R. L., & Macpherson, D. A. (2018). Macroeconomics: Private and public choice (16th ed.). Retrieved from https://www.cengage.com
· Chapter 9: An Introduction to Basic Macroeconomic Markets
· Chapter 10: Dynamic Change, Economic Fluctuations, and the AD-AS Model
· Chapter 11: Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics
· Chapter 12: Fiscal Policy, Incentives, and Secondary Effects
Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach you about economics. Retrieved from https://www.redshelf.com
· Chapter 4: It’s the Spending, Stupid: Budget Deficits Really Don’t Matter
· Chapter 22: If They Tell You They Predicted the “Financial Crisis,” They’re Lying
Recommended Resources
Text
Tamny, J. (2015). Popular economics: What the Rolling Stones, Downton Abbey, and LeBron James can teach you about economics. Retrieved from https://www.redshelf.com
· These chapters provide John Tamny’s perspective on a specific fiscal policy: taxes. The author and some other economists are not in favor of higher taxes. He gives the rationale for the government to implement a fiscal policy of lower taxes. This may give you a different perspective and add to your knowledge in answering the Fiscal Policy discussion forum question as well as give more information in working through The Great Recession of 2008-2009: Causes and Responses assignment this week.
· Chapter 1: Taxes are Nothing More than a Price Placed on Work
· Chapter 2: When We Tax Corporations, We Rob Them of Their Future
· Chapter 10: Conclusion: Bulldoze the U.S. Tax Code
Articles
Colvin, G. (2018, October 1). How to spot the next financial crisis. Fortune, 9–10. Retrieved from http://fortune.com/
· The full-text version of this article is available through the EBSCOhost database in the Ashford University Library. This article reflects on some of the causes of the Great Recession. More importantly, the author takes you into the future to discuss when and if another big recession will occur and what some of the triggers might look like. This article may assist you with your The Great Recession of 2008-2009: Causes and Responses assignment this week.
Committee for a Responsible Federal Budget. (2018, December 13). The deficit has never been this high when the economy was this strong (Links to an external site.) [Blog post]. Retrieved from http://www.crfb.org/blogs/deficit-has-never-been-high-when-economy-was-strong
· This blog post discusses the current debt high level in relation to business cycles. The debt is climbing in a very healthy economy which is unusual as debt usually grows during down economies and recessions. This is an interesting perspective and may assist you with your Government Budget Deficits (Debate) discussion forum this week.
Accessibility Statement does not exist.
Privacy Policy (Links to an external site.)
C ...
Similar to Sub-prime Crisis - Collapse of Lehman Brothers (20)
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the what'sapp contact of my personal pi merchant to trade with.
+12349014282
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the what'sapp number.
+12349014282
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the what's app number of my personal pi vendor to trade with.
+12349014282
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the what'sapp number of my personal pi merchant who i trade pi with.
Message: +12349014282 VIA Whatsapp.
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
1. Sub-prime Crisis - Collapse of Lehman Brothers essay
The collapse of Lehman Brothers
Introduction
As the subprime crisis becomes deteriorated, Lehman Brothers finally collapse in the sub-prime
crisis, because a large number of subordinated debts held by the company's financial products, as
well as other lower-grade mortgage-backed financial products. In addition, the other four large
investment banks disappeared after the deepening of the subprime crisis. They are bankrupt,
acquired or become held by American government through nationalization (Gerardi et al., 2008). In
general, the collapse of Lehman Brothers is the epitome of the subprime crisis, which attracted more
and more attention of the businessmen, scholars and government. In addition, it can be learnt a lot
through analysis the case of the collapse of Lehman Brothers, such as the risk management
knowledge of the financial institution, the government supervision of the financial corporation, the
experience and lessons to avoid the similar incidents and so on. This essay will critically analyze the
case (the collapse of Lehman Brothers) to find the reason of the collapse and gain some experience
and lessons from the case of Lehman Brothers. This essay proceeds as follows. The first part will
briefly introduce the essay, and then the second part will review the relevant literature about the
collapse of Lehman Brothers. The third part will briefly introduce the case of Lehman Brothers. The
fourth part will critically analyze the case and the final part will make some conclusions.
Literature review about the collapse of Lehman Brothers
A large number of scholars analyze the case of Lehman Brothers through different perspectives,
which can be divided into the following parts. (The process of the collapse of Lehman Brothers, the
reasons of the collapse, the influence of the collapse of Lehman Brothers and the experience and
lessons from the collapse)
Most studies about the process of the collapse of Lehman Brothers aim to describe how the Lehman
Brothers gradually become bankrupt to reflect the facts about the operation of the Lehman Brothers.
Beth (2010) depicts the details of the operation of the Lehman Brothers in the subprime crisis and
points out the gains and losses of the Lehman Brothers in the subprime crisis. In addition, the other
studies about the process of the collapse of Lehman Brothers aim to analyze the failure of the
Lehman Brothers in order to make some useful recommendations to the financial institution, which is
involved in the financial derivative products. Sender (2010) analyzes the case of the Lehman
Brothers and makes the recommendations that the financial institution will pay attention to the real
value of the underlying assets of the financial derivative products and establish the risks
management system. In addition, he also points out that the government should enhance the
financial supervision to avoid the similar incidents (Sender, 2010).
As a lot of financial institutions are bankrupt in the subprime crisis, many scholars pay more attention
to the reasons why the Lehman Brothers collapse in the subprime crisis and make several
recommendations to the financial institutions. Some scholars analyze the reasons from the corporate
perspectives such as the wrong operation strategy, the inappropriate risk management and so on.
Ricardo and Krishnamurthy (2008) analyze the operation strategies of Lehman Brothers and point
out that the diversified operation of the commercial banks is the direct reason for the collapse of the
Lehman Brothers. In addition, Caballero, Farhi and Pierre-Olivier (2008) argue that high leverage
2. operation and investment strategies will lead to the collapse of the Lehman Brothers and advocate
that the financial institutions can decrease the high leverage of operation to avoid the losses in the
balance table. However, Peretz and Schroedel (2009) argue that the high leverage operation and
investment strategies can not result in losses in the condition that the risk management is effective
and efficient. They also point out the ineffective risk management has to account for the collapse of
the Lehman Brothers (Peretz and Schroedel, 2009). In addition, they also suggest that the financial
institution should pay attention to establish the alarm system to warn the risk management and
adopts various risk management measures to control the financial risks under the acceptable level
(Peretz and Schroedel, 2009).
Besides, a large number of scholars analyze the reasons for the collapse of Lehman Brothers from
the economy and government perspectives. Carl (2009) argues that the collapse of the American
credit system finally leads to the failure of the Lehman Brothers. He points out that the aggravating
economic environment (the high inflation rate) force the American Federal Reserve to raise the
interest rate, which increase the unemployment rate and the pressure of paying back the housing
loans. Thus, many financial institutions involved in the housing loans are bankrupt and the American
credit system collapse, which accounts for the failure of the Lehman Brothers (Carl, 2009). However,
some scholars argue that the imbalance of the industries structure should be responsible for the
collapse of the Lehman Brothers. Dong-An and Bostic (2009) points out that the imbalance of the
industries structure finally result in the subprime crisis and Lehman Brothers is no more than one of
the large number of victims in the subprime crisis.
In addition, some scholars hold the opinion that the ineffective financial supervision of the
government should be blamed for the collapse of the Lehman Brothers. Anne (2009) argues that no
specialized laws and institutions can supervise the financial derivative products designed by the
banks because of the American financial supervision systems. He also points out that lacking of
ineffective supervision will result in the accumulated risks of the financial markets, which finally lead
to the collapse of the Lehman Brothers. Thus, he makes the recommendation that the government
should modify the supervision model to accommodate the change in the financial fields (Anne,
2009). However, there are some scholars, who argue that both the corporate factors and the factors
outside the corporation have to account for the collapse of the Lehman Brothers (Giselle, 2009). In
summary, this opinion summarizes the opinions from different scholars and is widely acceptable
now.
Most studies about the influence of the collapse of Lehman Brothers mainly focus on the negative
influence on the global economy. Lucas and Souleles (2008) analyze the economic circumstance
from the macroeconomic perspective and argue that the collapse of Lehman Brothers will break
down the credit system, which will has great negative influence on the economic development in
America. He also points out that the collapse of Lehman Brothers will decrease the confidence of the
American consumers, which will negatively affect the global economy (Lucas and Souleles, 2008). In
addition, Cassell and Hoffmann (2009) analyze the negative influence from the microeconomic
perspective. They argue that the collapse of Lehman Brothers will not also decrease the financing
channel of the corporations, but also increase the non-performance loans of the corporations, which
lead money to or buy the housing loans products from the Lehman Brothers (Cassell and Hoffmann,
2009). However, there are some scholars, who pay attention to the positive influence the collapse of
Lehman Brothers will have. Hatzius (2008) argues that the collapse of Lehman Brothers will warn
3. the government of the importance of the financial supervision, which will be beneficiary for
establishing the effective and efficient financial supervision system. In addition, he also believes that
the collapse of Lehman Brothers will enhance the international cooperation about the global financial
supervision (Hatzius, 2008).
The studies about the experience and lessons learnt from the collapse are mainly concluded from
the reason for the collapse of Lehman Brothers. Caballero, Farhi and Pierre-Olivier (2008) analyze
the reason from the perspectives of high leverage operation and investment strategies and conclude
that the financial institutions can decrease the high leverage of operation to avoid the shock from the
subprime crisis. In addition, Howell (2006) analyzes the reason from the perspectives of government
supervision and concludes that the government has to modify the previous supervision system to
enhance the financial supervision about the financial derivative products. In addition, he also
concludes that the government has to will improve the international cooperation to avoid the
appearance of the similar incidents (Howell, 2006). Besides, there are some scholars, who analyze
the reason for the collapse of Lehman Brothers and conclude that the individual investors should
choose the financial products carefully to avoid the evitable losses (Giselle, 2009).
In summary, different scholars make studies about on the collapse of Lehman Brothers from the
diversified perspectives and gain different conclusions. The studies about the reason for the collapse
of Lehman Brothers can be divided into two kinds (the corporate factors and the factors outside the
corporations). To understand the reasons for the collapse of Lehman Brothers completely, this paper
aims to adopt the method of extensive survey on the collapse of Lehman Brothers to find the primary
reason and gain some experience and lessons from the case of Lehman Brothers.
Case about the collapse of Lehman Brothers
This section will briefly introduce the case about the collapse of Lehman Brothers from the following
perspectives (the fundamental circumstance of the American economy (especially the financial
markets), which has much to do with the collapse of Lehman Brothers, the fundamental
circumstance about the process of the collapse and the influence of the collapse of Lehman
Brothers.
As the bubbles of the network economy crashed and the 911 event happened, the Federal Reserve
adopts the policy of decreasing the interest rate to accelerate the development of the economy,
which stimulates the booming of the housing industry and the American intension of purchasing the
houses (Cassell and Hoffmann, 2009). In this circumstance, the subprime loans become the prior
choice of those, whose credit standards can not reach the prior loans. Thus, some financial
institutions operated the business about the housing loans products and the financial derivative
products about housing loans. Lehman Brothers is one of the leading financial institutions in the
financial derivative products about housing loans. However, as American economy become hot and
the inflation rises, the Federal Reserve gradually increases the interest rate to avoid inflation, which
is the direct reason of subprime crisis. Thus, some institutions operating subprime loans are
bankrupt; some investment funds are closed and the stock markets vibrate frequently.
As one of the five largest investment banks all over the world, Lehman Brothers is the leading
corporation to operate the financial derivative products about housing loans; Lehman Brothers
accounts for about 11% of the market share in derivative products of housing loans (Karl, 2008). In
addition, Lehman Brothers adopts the aggressive financial strategies. On one hand, Lehman
4. Brothers adopts the high leverage coefficients (the assets/ equity ratio is higher than 30), which is far
from the supervised standard of the American commercial banks (Karl, 2008). The high leverage
coefficients will be apt to the financial risks and will be easily affected by the external stocks. On the
other hand, Lehman Brothers depends on the short-term financing bonds; the ratio of the short-term
financing bonds/total assets is as high as 50%, which will undoubtedly decrease the financing cost,
but increase the financial risks of bankrupt (Crowley, 2009). As the subprime crisis broke out, the
managers of Lehman Brothers were aware of the danger of the aggressive financial strategies and
made every effort to decrease the leverage coefficients and short-term financing bonds. But it is too
late to adopt these methods to save the corporation. Finally, Lehman Brothers hand out the bankrupt
application on September 15th, 2008 (John, 2009). Collapse of the Lehman Brothers has great
negative influence on the American even the global economy. Firstly, the collapse of the Lehman
Brothers not only does great harm to the financial industry in America, but also hurt the confidence
of the American consumers. Secondly, the collapse of the Lehman Brothers will increase the market
panic, which will do great harm to the short-term financing of the enterprises. Finally, the collapse of
the Lehman Brothers will result in the vibration of the stock markets all over the world, which will be
harmful for the global economic stability (Corder, 2009).
Critical analysis about the collapse of Lehman Brothers
Based on the literature review and analysis above, this part will critically analyze the reason for the
collapse of Lehman Brothers from external factors and the corporate, government and industry
perspectives. What's more, the author also wants to discuss the experience and lessons from the
collapse of Lehman Brothers in order to avoid the similar incidents.
Firstly, the macroeconomic control policy and the subprime crisis is the direct reason of the collapse
of Lehman Brothers. As the Federal Reserve increases the interest rate in order to decrease the
inflation rate and control the hot economy, those people, who borrow the housing loans from the
banks, can not afford the expense. Thus, the probability of the default about the housing loans begin
to rise and the value of the derivative products of the housing loans begin to decrease (Cassell and
Hoffmann, 2009). The financial institutions, who invest in the derivative products of the housing
loans will lose and face up to the financial difficulty. As the leading investors in the derivative
products of the housing loans, Lehman Brothers has to sell the assets to balance the loss. However,
the amount of the loss of the investment in the derivative products of the housing loans is large that
Lehman Brothers has to borrow money from the other banks. In the meanwhile, as the subprime
crisis broke out, none of the commercial banks are willing to take risks at saving Lehman Brothers,
which is on the edge of bankrupt (Caballero, Farhi and Pierre-Olivier, 2008). Thus, Lehman Brothers
has no choice but hand out the bankrupt application.
Secondly, this section will mainly discuss the reason for the collapse of Lehman Brothers from the
corporate perspectives.
On one hand, the aggressive financial strategies have to account for the collapse of Lehman
Brothers. The high leverage coefficients will decrease the corporate competence to reject the risks.
The number of the high leverage coefficient of Lehman Brothers reaches as high as 30.3 in August
31st, 2008 (Karl, 2008), which means the investment bank will be bankrupt if the losses reach 3.4%
of the total assets (Karl, 2008). In fact, the loss of investment in the derivative products of the
housing loans is so large that the total assets can not balance the losses, which means Lehman
5. Brothers is bankrupt. In addition, the financing channel of Lehman Brothers mainly depends on the
short-term loans, which will increase the financial risks of the corporation. The single financing
channel means the financial risks when the corporation faces up to the financial difficulty (Cassell
and Hoffmann, 2009). What's more, although the high short-term loans will decrease the financial
costs in the long-term run, it will also increase the financial burden of Lehman Brothers in the shortterm run. Thus, it is no doubt to see that none of the commercial banks are willing to borrow money
for Lehman Brothers when Lehman Brothers is about to be bankrupt (Caballero, Farhi and PierreOlivier, 2008).
On the other hand, the diversified operation and investment strategies will be blamed for the
collapse of Lehman Brothers. In order to achieve the profits increase through diversification, Lehman
Brothers entered the diversified business fields including commercial banks, insurance, capital
management; housing investment and so on. In general, the diversified operation and investment
strategies will decrease the operational and financial risks. However, because of the specialization of
the housing products and the relevant derivative products, the diversified business fields of Lehman
Brothers are closely related to the housing industry and the housing products (Caballero, Farhi and
Pierre-Olivier, 2008). Thus, when the housing industry is no longer prospect, the price of the housing
products will decrease. Thus, all the business fields of Lehman Brothers will suffer from the losses.
Finally, the ineffective risks management of Lehman Brothers will result in the collapse of Lehman
Brothers. Crowley (2009) argues that the financial product is dangerous unless it is under the control
of the corporate risks management. In addition, he also points out the ineffective risks management
of Lehman Brothers may result from the diversified operation model, the ineffective measure tools
about the risk management and the dependent risk management institutions of the corporation
(Crowley, 2009). On one hand, the diversified business will increase the exposure position of
Lehman Brothers. On the other hand, the trust risks and the liquidity risks can not be measured by
the tools that Lehman Brothers adopts. What's more, the excitation mechanism will stimulate the
managers to invest in the housing products at high risks. Thus, the ineffective risks management of
Lehman Brothers will account for the collapse of Lehman Brothers.
Thirdly, lack of the effective government supervision will lead to the collapse of Lehman Brothers. On
one hand, the effective supervision from the government can warn the financial institutions of the
financial risks, which can effectively avoid the accumulation of the financial risks (Peretz and
Schroedel, 2009). On the other hand, the effective supervision from the government will raise the
risk awareness of the financial institutions and enhance the competence of the risks management
(Cassell and Hoffmann, 2009). The managers of Lehman Brothers are willing to invest the financial
products, which are at high risks and profits. As the risks are not warned by the effective government
supervision, the risks begin to accumulate and lead to the collapse at last. Thus, lack of the effective
government supervision is the indirect reason for the collapse of Lehman Brothers.
Finally, this section will mainly discuss the reason for the collapse of Lehman Brothers from the
industry perspectives. On one hand, the imbalance of the industries in America tends to intensify. As
the industry structure change in America, the financial industry will rapidly increase in and the
manufacture industry will decrease accordingly. The surplus of the financial industry in America
finally leads to the subprime crisis. In addition, the relationship between the financial industry and
manufacture industry is being closer and closer. Thus, the subprime crisis will affect the financial
institutions through “Domino effect of bone”. Lehman Brothers is one of the victims of the imbalance
6. of the industries in America (Caballero, Farhi and Pierre-Olivier, 2008). On the other hand, the
imbalance of the financial industry in America will be the primary reason for the subprime crisis.
Firstly, the rapid increase of the virtual assets begins to take place of the financial entities. Secondly,
the rapid increase of the financial derivative products begins to surpass the underlying products. In
the end, the increasing new derivative products can not be effectively supervised to warn the risks,
which finally lead to the financial crisis and the collapse of Lehman Brothers.
In summary, the change of the economic environment (the macroeconomic control of the American
government), the error of the Lehman Brothers, the ineffective supervision by the government and
the imbalance of the industries structure has to account for the collapse of Lehman Brothers.
Based on the analysis about the collapse of Lehman Brothers, it can be learnt a lot to avoid the
similar incidents. As for the financial institutions, on one hand, it is necessary to establish the
effective and efficient department of risk management. On the other hand, the risk factors should be
taken into consideration when decisions are made or the operation and investment strategies are
adopted. What's more, the collapse of Lehman Brothers also reminds the corporate managers that
the short-term profits can not be gained at the expense of the long-term benefits. As regarding to the
government, it is essential to modify the current risk supervision systems to accommodate the
financial derivative products and institutions. In addition, the collapse of Lehman Brothers also
reminds the government of the importance of improving the competence of risk supervision.
Conclusion
Based on the analysis above, it can be concluded as follows. The collapse of Lehman Brothers is
resulted from the four factors--the change of the economic environment (the macroeconomic control
of the American government), the error of the Lehman Brothers, the ineffective supervision by the
government and the imbalance of the industries structure. In addition, it can be learnt from the
collapse of Lehman Brothers that the financial institutions should improve the risk management
competence and take the risks into considerations when making decision, while the government
should change pay attention to the risk supervision and change the current risk supervision systems
to accommodate the financial market.
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