This paper examines the factors that would have caused Lehman Brothers' Incorporated to fail or go into bankruptcy. These causes have been linked to the systemic collapse of the financial market; and also the effects of the financial market collapse on the real economy. The paper also looks at...

We study efficiency properties of competitive economies in which banks provide liquidity insurance and interact on secondary asset markets. While all banks are subject to extrinsic risk, a bank's portfolio choice determines whether it is prone to a bank run in one of the extrinsic states. Asset...

In the months preceding the failure of Lehman Brothers in September 2008, banks were willing to pay a premium over the Federal Reserve's discount window (DW) rate to participate in the much less flexible Term Auction Facility (TAF). We empirically test the predictions of a new signalling model...