Which 2008 event is widely identified as the collapse that intensified the global financial crisis?

The Lehman Brothers bankruptcy in 2008 is widely identified as the collapse that intensified the global financial crisis.

Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. With more than $600 billion in assets, it became the largest corporate bankruptcy filing in U.S. history at that time. The failure shocked markets because Lehman was deeply connected to banks and financial institutions worldwide.

The crisis had already been developing through falling U.S. house prices, mortgage defaults, losses on mortgage-backed securities, and heavy financial-sector leverage. Lehman’s failure sharply increased doubts about counterparties and froze important parts of credit markets.

The bankruptcy was not the sole cause of the crash. Bear Stearns had required emergency assistance months earlier, while American International Group received a government rescue immediately after Lehman failed. The episode helped prompt extraordinary central-bank and government interventions.