Blast From the Past: Lessons Learned From the Largest Bankruptcy in US History

By Dalvin Estrada

Business graph with arrows tending downwards

September 2016 marks eight years since Lehman Brothers filed for bankruptcy. The anniversary was acknowledged by former employees who still think fondly of the work they did for one the world’s largest investment banks. The filing remains the largest bankruptcy filing in US history, with $639 billion in assets and $619 billion in debt. Its assets far surpassed those of previous big bankruptcies like WorldCom and Enron.

Lehman Brothers was the largest victim of the US subprime mortgage-induced financial crisis that swept through global financial markets in 2008. According to CNBC, the Lehman Brothers collapse significantly intensified the 2008 crisis and contributed to the erosion of close to $10 trillion in market capitalization from global equity markets in October 2008.

It’s been eight years since the collapse and we are still learning lessons from the failure of Lehman Brothers, most recently from the Financial Accounting Standards Board (FASB) and its highly anticipated Current Expected Credit Loss (CECL). CECL requires institutions to measure expected credit losses reflecting reasonable and supportable forecast. To learn more about the CECL changes, read our most recent whitepaper.

Many regulatory and policy changes are still to come. What’s the best way to stay on top of all the changes and ensure compliance? With efficient and effective financial technology. The right investment in fintech mitigates risk and improves processes. SS&C PORTIA provides a broad set of middle- to back-office capabilities that allow investment managers to automate the day-to-day activity in investment portfolios to support global accounting requirements. Offered on a deployed and hosted basis, the solution supports a wide range of functions, including corporate action processing, internal reporting, client reporting, regulatory reporting, performance measurement, and post-trade compliance. For additional information download our brochure.

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