Lehman went bust because liquidity in the credit markets dried up - i.e they were unable to roll short-term financing to fund longer-dated balance sheet. The markets thought Lehman had big exposure to the US residential and commercial mortgages, hence they couldn&#x27;t borrow, hence they went bust.<p>A shame because they weren&#x27;t actually bankrupt - PWC has now recovered 100% of liabilities with assets to spare.