On September 15, 2008, under the influence of the subprime mortgage crisis, Lehman Brothers, an American investment bank operating 158, announced its application for bankruptcy protection. The bankruptcy of Lehman Brothers also triggered a global financial tsunami. The US Treasury and the Federal Reserve helped rescue Bear Stearns, which was on the verge of bankruptcy, but refused to rescue Lehman Brothers, which caused great controversy. Market confidence collapsed out of control and the stock market plummeted. An important lesson of the financial crisis triggered by this incident is that the competition among lenders not only fosters innovation, but also brings high instability.
From the bankruptcy of Lehman Brothers, we can see the difficult situation of policy makers in the face of the financial crisis. They don't want to be seen as eager to step in and rescue troubled financial institutions because they are too risk-seeking. However, in today's era, the market, banks and investors are all linked by a complex and intangible financial network, and the pain of letting large institutions fall on their own is unbearable.