Lehman Brothers Holdings Inc.

Lehman Brothers did not fail because of one accounting label. Its collapse became an accountability test because a highly leveraged investment bank accumulated large concentrations of difficult-to-sell real-estate assets, depended on confidence-sensitive short-term funding, represented a sizeable liquidity pool that did not equal cash freely available to the holding company in every stress, and used Repo 105 transactions to reduce its reported balance sheet around reporting dates without disclosing that practice. The enduring issue is whether leverage, collateral, valuation, liquidity, accounting, disclosure, audit, board oversight, supervision and resolution can be governed as one evidence chain before confidence disappears.