Lehman Brothers’ bankruptcy filing became a defining moment of the 2008 global financial crisis.
The investment bank filed for Chapter 11 bankruptcy protection on September 15, 2008. It was the largest bankruptcy filing in United States history at that time, with hundreds of billions of dollars in assets. The failure immediately intensified fears about the stability of banks and the global financial system.
Lehman had built substantial exposure to mortgage-related assets during the United States housing boom. As housing prices fell and defaults increased, those assets became difficult to value and sell. The firm’s collapse affected counterparties, money-market funds, and financial institutions around the world.
Lehman’s failure was not the beginning of the crisis. Problems had already appeared in the subprime mortgage market, and Bear Stearns had required a rescue earlier in 2008. However, Lehman’s uncontrolled bankruptcy sharply accelerated the panic and was followed by further emergency interventions.