【明報專訊】The saying that ''only change is constant'' cannot be better manifested in any other area than investment. This seemed particularly true to investors on 15 September 2008, when Lehman Brothers (雷曼兄弟) filed for bankruptcy protection.

1. The Bank

With a history of over 150 years, Lehman Brothers Holdings Inc was one of the largest investment banks in the world. In 2003 and 2004, it acquired five mortgage lenders, one of which specialised in loans made to borrowers without full documentation and in mortgage-related investments.

2. Subprime Mortgage Crisis

In 2000, the US Federal Reserve (美國聯邦儲備局) cut the federal funds rate to 1%. Because interest rates were low, investment managers could not make much money from traditional investment products. They turned to high-yield instruments such as mortgage-backed securities (證券). Banks may lend money to homebuyers who have poor credit records. Such loans are called subprime mortgages (次級按揭). Interest rates on subprime mortgages are high. Therefore, subprime mortgage-backed securities may bring high returns, but they are quite risky. In mid-2006, home prices in the US declined. Those who took out subprime mortgages had difficulty paying off their debts. Banks that held large quantities subprime mortgage-backed securities, including Lehman Brothers, lost a huge part of their capital. They had to look for new investors. Its attempts do so having failed, Lehman Brothers filed for bankruptcy protection on 15 September 2008.

3. ''Minibonds'' and Hong Kong

In Hong Kong, there were credit-linked notes in respect of which Lehman Brothers was the swap guarantor. Those notes, known as minibonds (迷你債券), were issued not by Lehman Brothers but by other investment agents. Investors could not reclaim their capital when Lehman Brothers collapsed. According to the Securities and Futures Commission (SFC, 證監會), minibonds in Hong Kong were worth $12.6 billion.

Among those who had invested in minibonds were elderly people having little experience in investment. They claimed that bankers had not explained to them the risks involved or had misled them into believing minibonds were so safe that they would not lose any money.

Investors lodged complaints with the SFC, saying banks had employed misleading strategies in selling minibonds. They complained that the SFC failed to play its watchdog role. Some banks settled with investors. The government urged banks to buy back minibonds. However, some investors did not receive compensation. Many lawsuits were filed against banks. The Monetary Authority subsequently introduced a Pre-investment Cooling-off Period, which allows investors to withdraw from investment plans.

4. Global Financial Tsunami

The global economy entered a recession, which is called the financial tsunami(金融海嘯). The US stock market indices dropped 89% in 16 months. The UK government nationalised top financial institutes. In October 2008 Iceland declared bankruptcy. Greece and Cyprus were on the verge of bankruptcy. In Asia, Indonesia's stock market suspended transactions in October 2008. Singapore saw a GDP loss of 6.3% in the third quarter of 2008.

The US government launched a series of quantitative easing (量化寬鬆) measures to create cash flow in the market, causing inflation in economies whose currencies are pegged to the US dollar.

However, economists and scholars have stressed that it was not the bankruptcy of Lehman Brothers that caused the financial tsunami. Its bankruptcy indeed resulted from a downturn.