No one knows. The fear was that Lehman, AIG, & others would take down their counterparties - e.g. every other major commercial and investment bank. That would have been catastrophic and would have sunk many businesses which rely on revolving lines of credit, particularly larger ones.
But we'll never know because the CDS market was utterly unregulated (not even information requirements), so we don't know how much everyone was into everyone else for.
No one knows. The fear was that Lehman, AIG, & others would take down their counterparties - e.g. every other major commercial and investment bank. That would have been catastrophic and would have sunk many businesses which rely on revolving lines of credit, particularly larger ones.
But we'll never know because the CDS market was utterly unregulated (not even information requirements), so we don't know how much everyone was into everyone else for.