The collapse of Lehman Brothers 10 years ago wasn't just a reckoning for the financial system — it was an epiphany for coders and entrepreneurs who thought they could do better.
Lehman's shuttering not only stunned nervous bankers, investors and savers. It sent shockwaves throughout the global economy; a symbolic fall from grace for one of the many institutions seen as too big to fail.
The day was Monday, September 15, 2008. Lehman Brothers Holding Inc. filed for bankruptcy, and the future of a financial behemoth holding more than $600 billion in assets and that employed 25,000 people was sent into disarray. It was the biggest bankruptcy filing in U.S. history.
"It was a big and powerful investment bank, so the announcement came as a shock," Nikolay Storonsky, a former equity derivatives trader at Lehman, told CNBC by email. "We were told without much warning and it seemed to happen quite quickly."
Storonsky, 34, worked at the investment banking giant — formerly the fourth biggest lender in the United States — for two years. The British entrepreneur feared he would struggle with further employment, being a recent graduate, but soon extended his trading career at Credit Suisse. Fast-forward 10 years and Storonsky is the chief executive of digital banking upstart Revolut, which he founded alongside developer Vlad Yatsenko.
The toppling of Lehman was one event in a two-year crisis. But its impact on capital markets was severe, leading to almost $10 trillion wiped off the market value of global equities in the month that followed.
Lehman's problems were largely attributed to its management of flawed mortgage-backed securities. These were securities that had been given favorable credit ratings from agencies, but which proved problematic as subprime mortgage borrowers defaulted in droves and the housing bubble burst.
The fallout from the bank's collapse resulted in reduced market liquidity, fiscal and monetary stimulus and widespread distrust of the banks.
Bailouts, sweeping regulation and consolidation in the banking sector ensued. New rules meant lenders had to deleverage and increase their capital buffers, a move many believe has mostly guarded the financial system from another meltdown of similar proportions.
But although financial conditions have mostly improved, Revolut's Storonsky believes one ramification remains: that consumers' trust in banks has dwindled significantly, and it hasn't recovered.
"I'd say that the trust in banks is not that strong," he said. "Recent scandals have undermined the biggest names, and I think we're beginning to see start-ups earn the trust of consumers."
Indeed, in the last few weeks two European banks have made headlines over such scandals. Denmark's Danske Bank has been investigating what is rumored to be Europe's largest money laundering scandal in history, while Dutch lender ING lost its financial chief a week after it was fined $900 million.