Letting Lehman Go: Critique, Social Change, and the Demise of Lehman Brothers

»Lehman fallen lassen. Kritik, sozialer Wandel und der Untergang der Lehman Brothers«. 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 critiqueinduced.