What financial crisis in 2008 led to the bankruptcy of Lehman Brothers?

The financial crisis that led to Lehman Brothers’ 2008 bankruptcy was the subprime mortgage crisis.

Subprime mortgages were home loans made to borrowers with weaker credit histories or limited ability to qualify for conventional terms. During the U.S. housing boom, many of these loans were bundled into mortgage-backed securities and more complex collateralized debt obligations, then sold to investors worldwide.

When U.S. house prices fell after peaking around 2006, borrowers struggled to refinance or make payments, especially as adjustable-rate mortgages reset at higher rates. Defaults and foreclosures rose, reducing the value of mortgage-related securities and undermining heavily exposed financial institutions.

Lehman Brothers filed for Chapter 11 bankruptcy on September 15, 2008. Its collapse intensified a broader global financial panic and credit freeze. The event is often described as a climax of the subprime mortgage crisis, although the wider episode is also called the 2007–2008 financial crisis. It was not the Eurozone crisis, the savings and loan crisis, or the Asian financial crisis.