As you may know, not too long before Bear Stearns was declared insolvent it was rated BBB; Lehman Bros was rated (A+) and Merrill Lynch (A+): they were all considered investment grade.
Before selecting Lehman Bros as an external manager, we went through a rigorous selection process that not only included examination of past performance of funds managed  2  BIS Review 119/2008  and Lehman’s ability to deliver superior returns, we also conducted a thorough examination of Lehman’s financials.