The South African Civil Society Information Service

Joseph Stiglitz on the Fall of Lehman Brothers

10 Oct 2008

The reason Lehman Brothers went down is twofold, says Joseph Stiglitz. Not only were their assets bad, but their products were also very non-transparent. The company simply engaged in a great deal of accounting gimmickry and lost people's trust.

Financial markets are based on trust says Stiglitz, and what happened with Lehman Brothers is a breakdown of trust. No one wanted to turn their money over to helping Lehman Brothers because they didn't know what Lehman's assets were worth.

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You can find this page online at http://sacsis.org.za/site/article/67.19.