The Tremendous Effects of Lehman Brothers’ Fall Five Years Later

Lehman Brothers Rockefeller centre
Lehman Brothers Rockefeller centre. David Shankbone

The bankruptcy of Lehman Brothers was the starting point of the worst financial crisis in our recent history. The collapse of one of the most important banking institutions spread its effects worldwide. Are we still suffering the consequences of this surprising fall? Have the authorities implemented new measures to avoid another huge financial and economic crisis?  Several IESE professors briefly answer these questions.


Ahmad Rahnema, IESEAhmad Rahnema, Professor of Finance

“I think the best explanation for the effect of the collapse of Lehman Brothers on the world of finance is given by the BBC, which compared the situation with Formula One racing. “There are some new rules that will slow the cars down a bit. None of the drivers will forget Lehman’s crash any time soon. But – with one big exception – the same sleek, money-making machines are still racing around the same circuit.


Jorge Soley, IESEJorge Soley, Senior Lecturer of Finance

Lehman’s assets were totally inadequate but so was U.S. financial oversight. Today, the global banking sector is healthier and more solvent, but at a cost of $1.4 trillion up until 2010 according to the IMF.”


Martinez-Abascal,-E IESEEduardo Martínez Abascal, Professor of Finance

“Five years after Lehman, measures have not been put in place to avoid bubbles that only benefit speculators and investment banks and whose burst only harms the real economy. The financial system is a giant with weaknesses that could be easily fixed.”


Markus Maedler, IESE professorMarkus Maedler, Assistant Professor of Accounting and Control

“Has the Lehman Brothers bankruptcy had an effect on financial reporting, on accounting, on disclosure? Of course it has. We have learned that adding risky accounting practices to risky business models and risky management habits makes for an explosive mix. In response, some old accounting rules have been changing and new rules are being created. Does this mean that there will never be another accounting scandal, corporate failure or crisis? Unfortunately, no – accounting rules simply are and remain imperfect. And as long as too many people have too many incentives to chase after the quick buck, there will always be some who will follow the letter of the rules to defeat the spirit behind them.