Which 2008 U.S. investment bank failure became the largest bankruptcy in American history?

Lehman Brothers was the 2008 U.S. investment bank whose failure became the largest bankruptcy in American history.

Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. The firm had accumulated major exposure to mortgages and other real-estate-related assets, while the collapse of the U.S. housing market damaged the value of those holdings.

The bankruptcy intensified the global financial crisis. Credit markets seized up, investors sold risky assets, and stock markets around the world fell. Lehman’s failure followed the rescue or takeover of other major financial institutions, including Bear Stearns and Merrill Lynch, but the government did not arrange a rescue for Lehman.

The bankruptcy is often treated as the single start of the 2008 crisis, although the crisis had developed earlier through housing losses, subprime mortgage failures, and financial-market stress. Lehman’s collapse instead marked a dramatic escalation that made the crisis impossible to contain.