What event in September 2008 intensified the global stock-market crash by destroying confidence in U.S. finance?

Lehman Brothers’ bankruptcy intensified the global stock-market crash in September 2008 by destroying confidence in U.S. finance.

Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. It was the largest bankruptcy filing in U.S. history at that time, with hundreds of billions of dollars in assets.

The failure followed years of expansion into mortgage-related securities and real estate finance. When U.S. house prices fell and mortgage defaults increased, the value of many financial assets became uncertain. Lehman could not secure a rescue or buyer.

The bankruptcy did not start the entire crisis; credit problems and market stress had already developed. However, Lehman’s failure sharply increased fears about counterparty risk, froze parts of credit markets, and contributed to further worldwide stock-market declines.