In a paper, Larry Ball argues that

inadequate collateral and lack of legal authority were not the reasons that the Fed let Lehman fail. …

… the primary decision maker was Treasury Secretary Henry Paulson–even though he had no legal authority over the Fed’s lending decisions. … evidence supports the common theory that Paulson was influenced by the strong political opposition to financial rescues. … Another factor is that both Paulson and Fed officials, although worried about the effects of a Lehman failure, did not fully anticipate the damage that it would cause.

James Stewart comments in the New York Times.