Lehman's Lesson: Good Companies Will Prevail

This week, TheStreet and RealMoney will be exploring the aftermath of Lehman Brothers' bankruptcy filing and the ensuing market chaos it brought to a head almost a year ago. Read all of our One Year Later coverage.

NEW YORK (TheStreet) -- Lehman Brothers' collapse a year ago was supposed to mark the death of the investment bank and the superiority of deposit-taking commercial banks.

Big leveraged trading bets and thin capital cushions ultimately led Lehman to bankruptcy and Bear Stearns and Merrill Lynch into distressed sales, feeding the conventional wisdom that the era of dominance for big Wall Street banks had come to a close.

But the troubles of Citigroup (C Quote) and soon Bank of America (BAC Quote) showed that having a large deposit base didn't preclude big problems. And, conversely, the quick rebounds of Goldman Sachs (GS Quote), a former investment bank, and JPMorgan Chase (JPM Quote), which has a big retail banking business, suggests a simple lesson to take away from the past year: Good managers and well-run companies are more important to a company's success than its business model alone.

In the days after Lehman's collapse, the advantage of having a large base of deposits -- the core of the commercial banking model -- became more apparent than ever. The biggest weakness that dragged down companies like Bear Stearns and Lehman is that they relied heavily on short-term funding, borrowing billions each night to fund their businesses.

Goldman and Morgan Stanley (MS Quote), the remaining two major, standalone Wall Street investment banks, were able to survive last fall by getting quick approval for bank holding company status from the Federal Reserve. This made them eligible for certain government aid programs, but also was a nod to the growing conventional wisdom that being a commercial bank was preferable to being an investment bank.