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your 1st question. The GFC did not happen because Lehman was not rescued. Lehman failed because of the GFC. A financial crisis happens because some kind of mismatch accumulates or resp. economic misallocation happens (too much bubble growth). your 2nd question. keywords: rating shopping, regulatory arbitrage. i am going list some points that might be ...


The crisis was mostly underway at least two years before Lehman's demise. Saving Lehman would not have been enough to stop the recession, housing market bust, and other problems.


Regarding how the rating agencies gave AAA ratings to CDOs and the like that clearly did not deserve those ratings - straightforward answer. The SEC licences all the ratings agencies as "nationally recognized statistical rating organizations" (NRSRO). It is blindingly obvious that the SEC was not actually overseeing the rating organizations that it was ...


U.S. Government DID save American International Group (AIG) from bankruptcy, since it was considered too big to fail, actually: a lot of financial institutions were insured by AIG. This Investopedia page is a nice summary on the topic about AIG's bailout. Here (Investopedia again) about Lehman Brothers, that became really too much leveraged and exposed to ...

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