Why did Lehman Brothers go bankrupt?
In: Economics
Because they were largely funded on short term debt, meaning every few days they would need to borrow tens of billions of dollars from other banks and corporations. So when concerns grew about the state of their business this funding was pulled and there was nowhere else to get it that quickly.
After Lehman failed the other banks who funded using short term debt, got acess to government lines of credit and more importantly government guarantees to prevent similar concerns from sinking them, too.
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