Lehman Brothers became the largest bankruptcy in United States history during the 2008 global financial crisis.
The investment bank filed for bankruptcy on September 15, 2008. Lehman had accumulated substantial exposure to the United States housing market through mortgages and mortgage-related securities. As housing prices fell and credit conditions deteriorated, investors questioned the firm’s ability to meet its obligations.
The bankruptcy intensified already severe stress in global credit markets. Money-market funds, banks, insurers, and corporations all faced uncertainty about their counterparties and access to financing. The event is widely regarded as a major escalation point in the financial crisis.
Lehman’s collapse is distinct from Bear Stearns’ rescue and sale to JPMorgan Chase earlier in 2008. It also differed from the government bailout of American International Group, which received emergency support rather than entering bankruptcy.