Lehman Brothers : A Global Financial Services Firm

2698 Words Sep 2nd, 2014 11 Pages
The Report

Submitted by
Johannes

Introduction
Lehman Brothers Holdings Inc. was a global financial services firm. Henry and Emanuel Lehman founded it in the year of 1850 in the city of Alabama. Before declaring bankruptcy in 2008, Lehman was the fourth-largest investment bank in the US, doing business in investment banking, equity and fixed-income sales and trading especially U.S. Treasury securities, research, investment management, private equity, and private banking.
Lehman Brothers had humble origins, tracing its roots back to a small general store that was founded by German immigrant Henry Lehman in Montgomery, Alabama, in 1844. In 1850, Henry Lehman and his brothers, Emanuel and Mayer, founded Lehman Brothers.

While the firm prospered over the following decades as the U.S. economy grew into an international powerhouse, Lehman had to contend with plenty of challenges over the years. Lehman survived them all – the railroad bankruptcies of the 1800s, the Great Depression of the 1930s, two world wars, a capital shortage when it was spun off by American Express in 1994, and the Long Term Capital Management collapse and Russian debt default of 1998. However, despite its ability to survive past disasters, the collapse of the U.S. housing market ultimately brought Lehman Brothers to its knee The Mortgage Crisis

Lehman borrowed amounts to finance their investment by way of leveraging or gearing i.e., the use of various financial instruments or borrowed capital,…
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