September 15 this year marked the 10th anniversary of Lehman Brothers’ bankruptcy.

Ten years ago, the investment bank filed for Chapter 11 bankruptcy protection. The filing remains the largest bankruptcy case in the U.S. history with Lehman still holding over US$639 billion in assets at that time.

Lehman’s demise also made it the largest victim of the U.S. subprime mortgage policy and fueled the subsequent financial crisis that swept through the global market in 2008. Generally speaking, subprime mortgage is a type of mortgage that is issued by lending institutions to borrowers with lower credit ratings. Lending institutions often charge interest on subprime mortgages at a rate higher than conventional mortgages in order to compensate themselves for carrying more risks.

Although 10 years have passed, we can still draw some important lessons from the bankruptcy of Lehman Brothers.

Firstly, large-scale lending should not be easily entrusted to private banks. Lehman Brothers’ bankruptcy has opened a window on strategies and tactics of many large private banks all over the world, the how’s and why’s of their catastrophic mishandling of fiduciary duties.

Secondly, quantitative easing by the U.S. Federal Reserve since 2008 has resulted in low interest rates around the world. While the resulting surge in capital flows to emerging markets has stimulated economic growth, it has also inflated assets and real estate bubbles. Under these circumstances, we can understand the importance and eagerness of taking deleveraging measures for some governments including China.

Moreover, there has been no major reform on the global financial structure since 2008. With China as an example, the country’s renminbi is internationalizing, but its share of global payments remains relatively small, with the U.S. dollar retaining its role as the world’s dominant reserve currency.

Finally, with the escalation of the trade war between China and the U.S., emerging economies and even the whole world will confront a rapidly changing and volatile external environment in the coming years. To meet the challenges, all countries need to manage capital flows more effectively, which will require much closer cooperation between central banks and financial regulators.