Lehman Case Study

        My part of the presentation is about the effects on the financial institutes and the immediate steps to calm the market. At the first, I will discuss that what institution are being affected by the whole situation then I will elaborate the steps that can help out to control the situation and calm the market. The situation will affect financial institutions like banks, stock exchanges/brokerage firms, and CDS markets. Securities and invested capital were the main reason because of which these financial institutes are impacted. Now come to the steps needed to calm the market.

        There are three major steps that I will take immediately in order to control the market situation. The three major steps are SEC halted Trading, Fed announcement to restore confidence and Lehman management restructuring. The first step we will take is to take the decision of temporary suspension toward the specific securities traded by the SEC. the step will enable us to correct an order imbalance and technical Glitch created by the situation and news announcements.

        While a public announcement by the Fed will help in restoring the market confidence. Fed will announce that they are giving more time to the Lehman in order to structure a takeover to take place and control the situation. However, the announcement of the bailout by the Fed can also increase the confidence of the customer.

        Now come to the third and most important step to calm down the market. Lehman management needs restructuring in the management team and also restructure their money market operations as issues of securities to restore the confidence of the market and to avoid the situation of bankruptcy for the next time.  Repurchasing from creditors and derivatives clients and Restructuring management can be turned out as the triumph.