Lehman Brothers declared bankruptcy in 2008 due to a total debt burden of $619 billion with remaining assets of $639 billion. The main reason for their significant amount of debt was subprime mortgage lending between the years of 2003 and 2007.Know More
During the housing bubble of 2003 and 2004, Lehman Brothers acquired five mortgage lenders, including two subprime mortgage specialists, Aurora Loan Services and BNC Mortgage. These lenders had many loans out to borrowers who didn't have full documentation of their financial status.
While these subprime loan companies were initially profitable, more and more borrowers defaulted on their loans. By 2007 there were serious concerns in financial markets about the profitability of companies that were carrying many defaulted subprime loans, yet Lehman Brothers underwrote more mortgage-backed securities than any other firm that year. This situation came to a head in August 2007, when two Bear Stearns hedge funds defaulted and caused panic in the marketplace. There was a temporary rebound in late 2007, but when Bear Stearns nearly collapsed in early 2008 due to subprime mortgages there was widespread belief that Lehman Brothers would be the next to fail. Lehman Brothers began announcing losses in June of 2008, and by September their stock was dropping sharply in value. By mid-September Lehman Brothers had only $1 billion in cash and declared bankruptcy.Learn more about Banks
The main function of a bank's treasury is to control and manage the bank's money as well as to make sure that capital and liquid assets are available to all parts of the bank. The treasury also liaises with the bank's regulating bodies. The regulators set the rules about capital and liquidity that banks must adhere to.Full Answer >
In addition to counting money, mathematics is used in banking to assess the potential risks and gains of various banking products, according to the Mathematical Association of America. A banker recommending savings or investment products needs the ability to evaluate interest yields on different products, for instance.Full Answer >
Certegy is a check risk management company. Merchants who are clients of Certegy accept Certegy's decision regarding whether to accept or reject any specific check received in payment for goods or services.Full Answer >
TD Ameritrade and Scottrade Bank are two banks that do not rely on the ChexSystem to approve customers for checking accounts, as of 2015. USAA bank does not use the ChexSystems when approving customers for free checking accounts.Full Answer >