If another financial institution the size of Lehman Brothers failed, the biggest step forward in terms of resolution would be the moves since the crisis to have derivatives centrally cleared.
At the time of Lehman’s demise, the bank had more than 900,000 derivatives exposures, only a small portion of which were exchange traded; the majority were complex, over-the-counter instruments. Holders of the small number of standardised options, futures and swaps traded on exchanges were the lucky ones – they were mostly resolved in less than two months.
