why was lehman brothers not bailed out 
regulators claimed they could not have rescued lehman because it did not have adequate collateral to support a bailout loan under the federal reserve s emergency lending powers 14 furthermore the financial system was by then more fragile compared to when the fed saved bear stearns this was one reason why the government was not able to find a private sector buyer for lehman some have alternatively speculated that regulators wanted to make an example out of lehman to show the cost of fiscal irresponsibility and excessive risk taking on wall st however if true this proved disastrous as contagion from lehman s failure rippled throughout the global economy 10who were the lehman brothers a new immigrant from germany to the u s henry lehman opened a dry goods store in montgomery alabama with the subsequent arrival of his two brothers emmanuel and mayer the store became known as lehman bros during the u s civil war cotton became an increasingly important domestic commodity the lehman brothers decided to capitalize on this by provisioning raw cotton at the dry goods store and then engaging in cotton trading in new york the firm eventually abandoned the south entirely relocating its headquarters to new york where it focused almost entirely on commodities trading and brokerage in the following decades the operations expanded into a full service financial firm 