市场经济案例分析 The reason why I selected this case is because it created a multiplier effect, a domino effect which in turn affected many other
In the previous assignment, we discussed the case of Lehman Brothers.
The reason why I selected this case is because it created a multiplier effect, a domino effect which in turn affected many other institutions. The bankruptcy of Lehman Brothers was a shock to many, including the people from other countries. Looking back, it can be deduced that many mistakes were made by different parties who were involved in the case. It could have easily been avoided, and the economic downturn could have been prevented, had right actions been taken at the right time.
Lehman Brothers followed a high risk, high growth business model, which allowed it to grow tremendously. However, the cause of the fall of the biggest investment bank of the United States of America, can be traced back to 2006 when the company started to offer loans to people without proper documentation and credit ratings. Credit ratings determine how well a person will be able to pay back on his or her mortgage, thereby, securing the bank’s position and ensuring that it is able to make profits, and get back the money that has been loaned.
This is the primary reason why the sub mortgage crisis occurred in the first place.
In order to increase the returns loans were given to people even without proper documentation. Which resulted in increased defaults, and many people failed to return the money they borrowed. The liabilities of the company increased, until finally. Even its assets were not able to sustain the company. Lehman Brothers finally had to file for bankruptcy on September 15, 2008.
Lehman’s operations were being supervised by a number of governmental and industry organizations. After Bear Sterns filed for Bankruptcy, including its primary regulator. The Securities and Exchange Commission (SEC), the Chicago Mercantile Exchange (CME), which regulated certain derivatives, the Office of Thrift Supervision. Which supervised Lehman’s thrift subsidiary, and the New York Federal Reserve Bank (NYFED) (Wiggins, Pointec, Metrick, 2014).
This event resulted in an economic crisis all over the world. Especially in countries whose currency was directly pegged with dollars. As the value of dollar depreciated, the exchange rate fluctuated as well, leading to economic crisis in other countries as well. This was an event that could have been avoided. However, the authorities and agencies evaluating the performance of Lehman Brother’s failed to raise the alarm on time.
为了增加回报，即使没有适当的文件，也向人们提供贷款。这导致违约增加，许多人未能归还借来的钱。公司的负债不断增加，直到最后。甚至其资产也无法维持公司的发展。雷曼兄弟最终不得不在 2008 年 9 月 15 日申请破产。市场经济案例分析
雷曼兄弟的运营受到一些政府和行业组织的监督。在贝尔斯登申请破产后，包括其主要监管机构。证券交易委员会 (SEC)、芝加哥商品交易所 (CME)、监管某些衍生品的储蓄监管办公室。其中监管雷曼兄弟的储蓄子公司和纽约联邦储备银行 (NYFED)（Wiggins、Pointec、Metrick，2014 年）。
The bankruptcy of Lehman Brothers could have been avoided had the authorities involved taken the right course of action. It was their moral obligation to do so, but they failed.
The ethical theory which I have selected in order to analyze the case at hand is that of Virtue Ethics. It states that an action is right, if and only if. It is similar to how a virtuous agent, purely out of habit and character, decides to do (Rosalind Hursthouse, 1999). I stand by the moral opinion that when the companies and agencies who conducted the audit and analysis of Lehman Brothers accounts. And books, did not highlight the issues that the company was facing.
Morally, these should have been highlighted and authorities should have been informed much in advance. Then this entire fiasco could have been avoided and the company would not have had to file for bankruptcy. Therefore, I am of the opinion, that the actions of all agencies were incorrect, and it is not something that a virtuous person would have done. These actions were incorrect and ethically wrong.
Another reason why I feel that this theory strongly supports my reason is because there were multiple courses of action which could have prevented the downfall of Lehman Brothers, and thus the economy. The government could have bailed the bank out or even more money could have been injected into the economy to control the trickledown effect. However, no such preventive measure was taken by the parties involved. This resulted in the worst case scenario that could have been prevented. And eventually led to an economic relapse, that affected the entire world.
In comparison of virtue ethics, I will be discussing deontology theory. It states that the nature of the act itself, regardless of the consequences, is of relevance (Onora,O’Neill). From this premise, it can be presumed that Kant never believed in how the consequences would affect the majority. Rather he focused on the nature of the act. If the nature of the act was deemed good by the majority, then the act was considered to be good. However, one argument against this theory is that the nature of the act can be different according to the person who is acting on it. This is governed by a person’s beliefs, and thus, it can differ from person to person.
In the case of Lehman Brothers, this theory would state that the nature of the act, i.e. the actions of the parties, agencies. And government organizations involved. Therefore, their actions count regardless of the consequences, which should not be the case, as their lack of due diligence resulted in an economic pandemonium, which affected not just the United States of America, but also the entire world. In my opinion, deontology not only supports the actions taken by the parties involved, but also does not take into account the resulting outcomes. Therefore, this theory is flawed in nature, and virtue ethics, offers a better understanding of how the companies went wrong.