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from hubris to a tail between its legs



In just over two months, 11 years have passed since the collapse of Lehman Brothers captivated audiences around the world, with the sight of workers recently fired leaving with boxes containing their products.

Even though that was developing, very few expected what would follow. It was an unprecedented event caused by the Federal Reserve that challenged what was then a unanimously accepted orthodoxy, that the central bank would intervene and save financial institutions "too big to fail".

After all, only a few months earlier, in March 2008, he had intervened to prevent the collapse of the smaller bear bears. That was the first rescue of a intermediary since the Great Depression in the early twentieth century and culminated with the company in charge of another banking giant of the United States, JP Morgan.

Others, including insurance giant AIG, also received assistance, which partly explains the impact of the decision to let Lehman Brothers, which only a year earlier had been rated by Fortune magazine as number 1 among the "signatures". of most admired securities ", was filed for bankruptcy.

The fate of Bear Stearns turned out to be a mere foretaste of what was going to fall on the financial markets and the global economy, in part thanks to the Federal Reserve's decision to let Lehman Brothers collapse, which caused chaos in the financial markets, froze credit and caused fears that other large financial institutions will collapse in a similar way, causing them to lose their ability to borrow.

The consequences of letting Lehman fall while struggling to renew existing debt It reverberated throughout the world, sinking economies into a recession.

Ironically, the worsening financial crisis forced central bankers to bail out other banks, contributing directly to increasing public debt in Europe and triggering a sovereign debt crisis that would almost lead to the collapse of the euro.

In a way, the view of former workers who leave what was once the largest financial services company in the world, even briefly, in the same way it happened Employees of Lehman Brothers a decade earlier it is just a reminder that the consequences of that crisis are still valid, although the decline of the old German power had its own peculiar reasons, including a wider decline in investment banking in Europe.

By announcing around 18,000 job cuts and leaving its stock business, Deutsche Bank acknowledged the defeat in its long ambition to compete with global banks based in the United States. Now it will return to its roots, mainly for German industrial companies.

It is not that the markets were too impressed, as the shares fell more than 5% after the restructuring plan was announced.

The Deutsche Bank story is just one among many for a Financial system that went completely out of the rails in the boom years, marked by arrogance, arrogance and inadequate regulation.

The bank was one of those who received fines for the Libor scandal, where it was discovered that commercial lenders had manipulated a system of interest rates against everything from commercial loans to mortgages. The share of Deutsche Bank was more than $ 2 billion.


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