Lehman Brothers filed for bankruptcy on September 15, 2008, marking a pivotal moment in the 2008 financial crash.
The investment bank’s filing was the largest bankruptcy in U.S. history at the time, involving more than $600 billion in assets. Lehman had accumulated substantial exposure to U.S. mortgages and mortgage-related securities. As the housing market weakened and those assets lost value, the firm struggled to raise capital or find a buyer.
The bankruptcy intensified panic in global financial markets. Credit became harder to obtain, bank shares fell, and investors questioned the stability of other major institutions. The following day, the U.S. government announced an $85 billion rescue loan for American International Group, or AIG, which faced severe liquidity problems.
Lehman’s collapse is often confused with the later passage of the Emergency Economic Stabilization Act. The U.S. House initially rejected that legislation on September 29, 2008; Congress enacted it on October 3. Those dates came after Lehman’s bankruptcy and were separate events in the unfolding crisis.