Lehman Brothers was the investment bank whose 2008 bankruptcy intensified the global financial crisis.
Lehman filed for Chapter 11 bankruptcy protection on September 15, 2008. It was the largest bankruptcy filing in United States history at that time, with hundreds of billions of dollars in assets. The failure shocked financial markets because Lehman was deeply connected to banks, investors, and the global market for mortgage-related securities.
The bank had expanded heavily into real estate and mortgage finance before the crisis. As American house prices fell and mortgage defaults increased, securities linked to subprime loans lost value. Lehman could not raise enough capital or complete a rescue transaction, and its collapse triggered a severe worldwide loss of confidence.
Lehman is sometimes grouped with Bear Stearns, which failed earlier in 2008, and Merrill Lynch, which was acquired by Bank of America. Those institutions faced major distress, but they did not enter bankruptcy in the same way.