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The Lehman Brothers bankruptcy, three years later

Jeremy Hobson: It has been exactly three years to the day since Lehman Brothers collapsed. Many economists say that event all by itself dramatically escalated
our slide into recession.

We're going to take a trip down memory lane now with our New York bureau chief Heidi Moore. Good morning.

Heidi Moore: Good morning.

Hobson: So take us back to that day three years ago, Sept. 15, 2008, when Lehman Brothers filed for bankruptcy. You were at the Wall Street Journal at the time. What happened?

Moore: It was an incredibly emotional weekend for everybody. As reporters, we were scrambling all weekend to reach everybody we knew who would have any bit of information. The news was moving fast: Lehman was going to be acquired, it wasn't going to be acquired. At the very last minute, it filed for bankruptcy. And everyone that I talked to personally was incredibly overcome by emotion.

Hobson: Did you realize at the time the implications of a Lehman Brothers bankruptcy, that it could really ripple across the entire economy as it did?

Moore: I think that was in the back of people's minds because it was literally unthinkable. It was as if a gasp had gone up from the entire financial markets. In many cases, we didn't even have rules in place to govern an institution like that that would be bankrupt, which is why the Lehman bankruptcy extends to this day. We just didn't even have a playbook.

Hobson: And now here we are, three years after that fact. You cover Wall Street everyday -- have things changed? Could there be another Lehman?

Moore: I don't think there could be another Lehman because we've seen what the costs of a Lehman are. If we allow failure, it extends really quickly. And of course now we have the Dodd-Frank financial package that's designed to give us a healthier banking system.

Hobson: And it has a living will for big banks, so that if they have to fail, then there's an orderly way for them to do that.

Moore: Right. There's a school of thinking that says, 'good luck with that,' because getting a bank to write down everything it owns on any given day is really hard. But we're trying. The question is: can we get to a place where we are fully secure in our financial system again? That will probably take decades.

Hobson: Marketplace New York bureau chief Heidi Moore, thanks so much.

Moore: Thank you Jeremy.

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