INTERNATIONAL ACCOUNTING.

INTERNATIONAL
ACCOUNTING

Lehman brothers used Repo 105 which was an accounting
gimmick and the reason of the collapse of the company.
Under this system, the company was allowed to enter into
repurchase agreement that allowed them to borrow funds
in excess in exchange for collateral for shorter duration
(Wiggins and Metrick 2019).
The downfall of Lehman evidently shows the relationship
in between regulations and action management
arrangements.

Defective accounting policy resulted in the
downfall
The higher rate of dependency on the investors for the
purpose of capital investments and also credit ratings.
There was a lack of monitoring the financial regulatory
framework and reducing the dangers across has
synchronized entities and markets.
This collapse provided huge money market move,
whereas in a span of 3 hours there was US$550 billion
changed hands which witnessed an immediate response
and injection from the U.S (Adu-Gyamfi 2016).

References list:
Adu-Gyamfi, M., 2016. The Bankruptcy of Lehman
Brothers: Causes, Effects and Lessons Learnt. Journal
of Insurance and Financial Management, 1(4).
Wiggins, R.Z. and Metrick, A., 2019. The Lehman
Brothers Bankruptcy B: Risk Limits and Stress
Tests. Journal of Financial Crises, 1(1), p.3.