Lehman Brothers Failure: What Lessons Have We Learned?

It's been a year since Lehman Brothers failed, and its various business entities wither dismantled or carved up amongst other financial institutions. Barclays and Nomura got the biggest chunks at bargain-basement prices, and are thus now positioned to make some big profits as the economy starts to improve, at least on paper. The proof is int he pudding, though: unemployment figures. Indeed, amongst he still-unemployed are the non-executive staff members of Lehman Brothers, were were left high and dry when Lehman Brothers imploded.

Those employees not retained by Barclays and Nomura were out in the cold, competing for fewer opportunities in a radically shrunken job market.

What are the lessons from the Lehman Brothers collapse? It depends on whom you ask. Some could say that the Federal Reserve's failure to bail out Lehman Brothers sped up the oncoming recession, whose effects are still being felt around the world. Others would argue that the Lehman Brothers collapse was an object lesson in cause and effect: that fiscal mismanagement to that extent will result in extinction, and that the Fed was right in letting Lehman Brothers fail. Still undefined, though, is exactly how big "too big to fail" actually is, and if such a distinction should exist in the first place. Meanwhile, the big-bonus culture in the banking world has not changed.