Which bank’s collapse in 2008 became a defining moment of the global financial crisis?

Lehman Brothers’ collapse became a defining moment of the 2008 global financial crisis.

The investment bank filed for bankruptcy on September 15, 2008, after failing to find a buyer or secure enough support. With assets of about $639 billion and liabilities of about $619 billion, it was the largest bankruptcy filing in United States history at that time. The failure intensified fear about the health of banks and financial institutions worldwide.

Lehman had been heavily exposed to the United States housing market and mortgage-related securities. As home prices fell and mortgage defaults rose, those assets lost value. The bank’s bankruptcy froze confidence in financial markets and contributed to severe stress in credit markets, stock exchanges, and the global economy.

Bear Stearns had already been rescued and sold to JPMorgan Chase in March 2008, while Merrill Lynch was bought by Bank of America. Those events are sometimes blended together, but Lehman Brothers was the major institution that actually entered bankruptcy in September.