The largest bankruptcy in American history. On September 15, 2008, Lehman Brothers threw in the towel and resorted to Chapter 11, saying goodbye to global finance and triggering the new Great Recession, the worst crisis since the Depression of 1929. The bankruptcy, which has become a case to be studied in school books, torments still the sleep of Wall Street and the US authorities and beyond.
In the 15 years since the collapse a wave of regulations has hit the banking sector, but despite this there have been several shaking ‘Lehman’ moments. The ‘bailout’ of Credit Suisse and the bankruptcy of Silicon Valley Bank have brought the nightmare back to the fore in recent months, which have rekindled fears of a new shock to the system with unpredictable consequences.
If in 2008 it was subprime mortgages that pushed Lehman to throw in the towel, causing a domino effect that spared no one, in March it was the rise in interest rates that triggered the crisis at Svb – the symbolic bank of Silicon Valley and the lack of preparation with respect to the aggressive tightening of interest rates by the Fed. However, the fears proved to be unfounded: the problems of Svb, Signature Bank and First Republic did not affect the banking industry which, thanks to the rules passed in 2008 and 2009, it is more solid and better capitalized. As then, however, there is the issue of the so-called ‘too big to fail’ banks. If after Lehman the tendency had been to avoid creating credit giants, now the trend has strongly resumed and the major American institutions are even larger than they were in 2008 thanks in part to a deregulation that favored them.
In the 15 years since what was one of the darkest days in the history of Wall Street, the Fed has confirmed on more than one occasion that it is a beacon for global monetary policy, a ‘savior of last resort’.
It was so in 2020 when Covid launched a new series of unprecedented measures to avoid the crisis following the closure of the world economy. Maneuvers that now force it into a balancing act between the fight against inflation and the need to avoid a recession.
Of the protagonists of 2008, the only one still on the stage of American and world finance is Jamie Dimon. The CEO of JPMorgan, considered by many to be the wizard of Wall Street, is still in his place and his name has been circulated cyclically for the role of Treasury Secretary.
Dimon is now a beacon for Wall Street and for American politics which, when needed, does not hesitate to call him given the experience, respect and admiration he has earned over the decades despite the slip of the ‘Whale of London’ ‘. High-level political contacts who, however, do not seem to tempt him to leave his post and embark on a new adventure. (TO
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2023-09-15 12:38:00
#years #Lehman #Brothers #nightmare #scary
