Lehman Brothers

Do you know the number in the United States which lost their housing in 2007?

• 630 000 persons

( six undred and thirty thousand )

Do you know the number of non-payment in 2007?

• 1 268 000 persons

( one million two hundred and sixty eight thousand )

INTRODUCTION :

Lehman Brothers was a multinational investment bank proposing diversified financial services. The head office of the firm was in New York, and it possessed other regional seats in London and Tokyo as well as diverse desks worldwide. it officially went bankrupt on September 15th, 2008 (for lack of buyers) further to the world financial crisis arisen from the subprime mortgage crisis. At the beginning of 2010, a report of the American justice reveals that since 2007, the bank masked its debts. He accuses the former leaders of having used in a excessive way an accounting technique, the Repo 105, which led " to present an erroneous balance sheet "

Lehman Brothers was an actor in the domains of the investment bank, the shares and the bonds, the market studies, the capital-investment and the private bank. It was a leading player of the loan market of American states.

I. Presentation

Key date :

1850 : Creation of lehman brothers in Alabama by the brothers lehman

1887 : Movement of the head office in New York, joined the New York Stock Exchange

2007 : Attempt of pay of subprime, bank on the prowl

2008 : The state does not help lehman brothers

15 septembre 2008 : bankruptcy of lehman brothers

Graph of the share price of lehman brothers :

The highest point

The stock market price of lehman brothers went tumbled

II. The crisis

A. The bankruptcy of Lehman Brothers

The main cause of this failure is the Subprime Crisis; it broke out in the second half of 2006 with the crash of the subprime at the United States. Borrowers were no longer able to repay and interests rates have fallen historically. And it is this crisis which provoked a financial crisis.

The 15 of September 2008, Lehman Brothers holding declares bankruptcy.

It will try to liquidate its positions in subprime mortgage. (Positions in finance, describe the amount of a financial).

Losses from these positions lead the bank to sell for six billion of assets.

Market capitalization will lower of 73% and unfortunately there will be no buyer. The state will help other banks as Bear Stearns in March 2008, Fannie Mae and Freddie Mac in September 2008 but will not help to make an example of one.

Moreover, Bank of America will save Merrill Lynch, another bank, while many thought it would help Lehman Brothers.

The courtyard of the award in 1994 was 4.53 USD (dollar), in 2007 was 85.80 USD, the highest and in 2008 it relapsed at 3.65 USD.

16 and 17 September 2008, the British bank Barclays acquires the activities of the investment bank and brokerage Lehman Brothers,

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