A year on, and Lehman fallout still being felt around the world
The collapse of Lehman Brothers a year ago tomorrow was a convulsion whose impact spread far beyond the death of a single institution.
Lehman was a tripwire for a financial meltdown that shook economies, altered government policy and affected the lives of millions in ways we still cannot fully calculate, though we experience the fallout every day.
While it was far from the only financial failure of 2008, the Lehman bankruptcy turned what had been a credit crunch into a crisis, one that would quickly deepen into the worst decline since the Great Depression of the 1930s.
As a result, markets collapsed, wiping out billions of dollars, euros, yuan and yen. Millions lost their jobs around the world. Trillions were spent on bailouts and stimulus plans. Investors lost fortunes on commodities, currencies, real estate and stocks. Historic names in business and finance - Washington Mutual, Northern Rock, Woolworths, General Motors, Bearing Point - collapsed, were crippled or were swallowed up.
The credit crunch was already happening when Lehman Brothers - a 158-year-old firm with roots as an Alabama cotton brokerage - declared bankruptcy on September 15.
It was the largest bankruptcy in the United States' history. But that was not its true significance. Rather, for once, the US government did not step in to engineer a rescue as it had for fellow Wall Street giant Bear Stearns. The decision stunned bankers and investors. It destroyed the assumption that the government believed some banks were too big to fail, which had been an unspoken guarantee underpinning the financial world.
Denying a bailout meant Lehman's losses would quickly spread to other banks and no troubled bank could be assumed to be safe. More importantly, no financial institution could be assumed safe. The web of exotic and little-understood financial vehicles and instruments - MBSs, CDOs, SIVs - were too deeply interwoven among them all. No one could foresee how far the chain reaction of losses could spread.