What crisis caused the worldwide stock-market collapse associated with Lehman Brothers’ September 2008 bankruptcy?

The crisis associated with Lehman Brothers’ September 2008 bankruptcy and a worldwide stock-market collapse was the global financial crisis.

The crisis grew from problems in the U.S. housing and credit markets. Many mortgages had been extended to risky borrowers, and those loans were bundled into complex securities held by financial institutions around the world. When U.S. house prices fell and mortgage defaults increased, confidence in the value of financial assets deteriorated.

Lehman Brothers filed for bankruptcy on September 15, 2008. The failure intensified panic, froze credit markets, and contributed to sharp stock-market declines internationally. Governments and central banks responded with rescues, guarantees, emergency lending, and stimulus measures.

The crisis is sometimes called the subprime mortgage crisis, but that phrase describes a major cause rather than the entire global event. Its effects included recession, unemployment, bank failures, and long-lasting regulatory changes.