On September 15, 2008, Lehman Brothers, a giant investment bank with a storied history, filed for bankruptcy. The shock was profound; world markets melted down.  

Over the next few days, one financial behemoth after another, including American International Group (AIG), Washington Mutual, and Wachovia collapsed. The crown jewels of Wall Street – Morgan Stanley and Goldman Sachs – slid toward the abyss. The Federal Reserve, the Treasury, and other regulators were forced to step in, sometimes in conjunction with famous private investors, to rescue the system. The government in effect nationalized AIG and, after two cliffhanging votes in Congress, it directly injected capital into leading private banks. 

Ever since then, debates have raged about why the authorities – the Fed and the Treasury -- allowed Lehman to go broke, after earlier helping to salvage a series of other institutions. 

In this Podcast, INET President Robert Johnson and INET Research Director Thomas Ferguson review those dramatic events. They also draw disquieting parallels between the Lehman debacle and more recent episodes of financial deregulation, including recent controversies over crypto and private equity.