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Sunday, September 22, 2013

'Lehman Was Not Alone – Measuring System Risk in the 2008 Crisis'

Robert Engle at the INET blog:

Lehman Was Not Alone – Measuring System Risk in the 2008 Crisis, by Robert Engle: On September 15, 2008, Lehman Brothers filed for bankruptcy and ushered in the worst part of the recent financial crisis. Today, we still discuss whether taxpayer money should have been used to rescue Lehman. My colleagues at NYU and I have developed measures of systemic risk, and this fifth anniversary affords us a good opportunity to look at what these measures would have indicated to Treasury Secretary Paulsen if they had been available at that time.
The answer is quite surprising. ... On the website, you can go back to August 29, 2008, to see the ranking of U.S. firms based on SRISK.  . Was Lehman at the top of the list in 2008? No. In fact, it was Number 11. ...

    Posted by on Sunday, September 22, 2013 at 10:44 AM in Economics, Financial System, Regulation | Permalink  Comments (20)



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