The Fed and Lehman Brothers: Introduction and Summary

18 Pages Posted: 18 Jul 2016

See all articles by Laurence Ball

Laurence Ball

Johns Hopkins University - Department of Economics; National Bureau of Economic Research (NBER); International Monetary Fund (IMF)

Date Written: July 2016

Abstract

Why did the Federal Reserve let Lehman Brothers fail? Fed officials say they lacked the legal authority to rescue the firm, because it did not have adequate collateral to borrow the cash it needed. This paper summarizes a monograph that disputes officials’ claims (Ball, 2016). These claims are incorrect in two senses: a perceived lack of legal authority was not why the Fed did not rescue Lehman; and the Fed did in fact have the authority for a rescue.

Suggested Citation

Ball, Laurence M., The Fed and Lehman Brothers: Introduction and Summary (July 2016). NBER Working Paper No. w22410. Available at SSRN: https://ssrn.com/abstract=2810920

Laurence M. Ball (Contact Author)

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