Originally Posted by Unregistered

The reason why Lehman collapse is about poor risk management within the organization not just the risk managers alone. The amount of toxic that it have wasn't reported and never measured. When crisis come, they have problem finding fundings. Everyone demand higher spread where over night Libor spike beyond 500bps. CDS start to widen to a point of no return. It is also because of the funding issue that resulted to 3s/6s fixing spreads.