Lehman Brothers’ bankruptcy became the largest in U.S. history during the 2008 financial crisis.
The investment bank filed for Chapter 11 bankruptcy protection on September 15, 2008, reporting assets of about $639 billion. Its failure followed years of expanding exposure to mortgages and complex securities linked to the U.S. housing market. As housing prices fell and mortgage defaults increased, the value of many related assets became uncertain.
Lehman’s collapse intensified the global credit crisis because financial institutions were connected through lending, derivatives, and short-term funding markets. The bankruptcy is often described as a direct trigger for the most severe phase of the 2008 crash, although the crisis had already been developing through the housing downturn, the failure of mortgage lenders, and the rescue of Bear Stearns. Lehman was an investment bank, not a conventional commercial bank.