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Letting Lehman Go: Critique, Social Change, and the Demise of Lehman Brothers
Lehman fallen lassen: Kritik, sozialer Wandel und der Untergang der Lehman Brothers
[journal article]
Abstract The collapse of the U.S. investment bank Lehman Brothers marked the escalation point of the financial crisis of 2008. Yet, while the consequences of the collapse are widely discussed, the developments that led to Lehman Brothers’ demise have yet to be dealt with from a sociological perspective. In t... view more
The collapse of the U.S. investment bank Lehman Brothers marked the escalation point of the financial crisis of 2008. Yet, while the consequences of the collapse are widely discussed, the developments that led to Lehman Brothers’ demise have yet to be dealt with from a sociological perspective. In this paper, we tackle this research gap by asking why Lehman Brothers – as opposed to other ailing banks – was not saved by the US regulators. We will show that mounting pressure from public opinion caused a shift in the risk perception on the side of the regulators. Initially oriented towards the economic risk associated with a potential failure of Lehman Brothers, the critique of the 2008 bailouts prompted regulators to weight the political risks of further bailouts over the economic risk of the bank’s collapse. Thus, we argue that the social change brought about by the collapse of Lehman Brothers was critique-induced.... view less
Keywords
insolvency; investment behavior; public opinion; political action; banking supervision; financial crisis; political actor; regulation; real estate; market; United States of America; criticism; investment; business concept; bank; economic success; outside financing; credit institution; housing market; venture capital; social change
Classification
Economic Sectors
General Sociology, Basic Research, General Concepts and History of Sociology, Sociological Theories
Free Keywords
Lehman Brothers; disaster thresholds; risk perception; public opinion; financial crisis of 2007; social change
Document language
English
Publication Year
2017
Page/Pages
p. 196-217
Journal
Historical Social Research, 42 (2017) 3
Issue topic
Critique and Social Change: Historical, Cultural, and Institutional Perspectives
DOI
https://doi.org/10.12759/hsr.42.2017.3.196-217
ISSN
0172-6404
Status
Published Version; peer reviewed