simulation page

Product Overview

This case examines the causes and consequences of the Lehman Brothers bankruptcy during one of the most fascinating weekends in financial history. It's about the commercial paper market, a major funding market served by Lehman Brothers, and the events that led to "breaking the buck" on money market funds. It also examines the CDS market where Lehman was such a big player, the potential impact that CDSs had on the crisis, and the notion and validity of the too-big-to-fail hypothesis.

Learning Objectives

• Discuss the causes and consequences of the Lehman Brothers bankruptcy • Examine the commercial paper market, a major funding market served by Lehman Brothers, and the events that led to “breaking the buck” on the money market funds • Examine the CDS market and the potential impact that CDSs had on the crisis • Explore the moral hazard issues surrounding the banking sector and the notion of too big to fail