The 2016 Lehman Brothers

16.09.2016 • Investing

From the Southbank Private Briefing (Great Britain) – Here’s a question for the anniversary of the Lehman Brothers bankruptcy in 2008: is the world’s banking system actually worse off now than it was when it nearly destroyed capitalism?

Think about your answer. While you’re thinking about it, consider this from a paper published this week by Harvard economists Larry Summers and Natasha Sarin:

To our surprise, we find that financial market information provides little support for the view that major institutions are significantly safer than they were before the crisis and some support for the notion that risks have actually increased.

That’s not good news. Investment banks have paid over $40 billion in fines related to the 2008 crisis. The banks sold high-risk mortgage-backed securities to investors without doing their due diligence on the “safety” of those securities. That’s a polite way to describe what they did.

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