15 October 2008
Critics have said that Lehman's failure made the crisis that much worse and, because Lehman was a force in the commercial paper market, put a crimp in businesses' ability to finance themselves when Lehman disappeared.The Fed and Treasury were trying to find someone to buy the firm but it just wasn't possible. Unlike American International Group, which had collateral to put up, Lehman did not.
The firm could not post sufficient collateral to provide reasonable assurance that a loan from the Federal Reserve would be repaid.
