Lehman Brothers’ bankruptcy in September 2008 became a key turning point in the global financial crisis.
Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection on September 15, 2008. At the time, it was the largest bankruptcy filing in United States history. The firm had accumulated substantial exposure to mortgages and mortgage-related securities, and losses in the housing market undermined confidence in its balance sheet.
The collapse intensified fear throughout global financial markets. Banks became more cautious about lending to one another, credit conditions tightened, and equity markets fell sharply. The failure followed the government-supported rescue of Bear Stearns earlier in 2008, but authorities did not arrange a similar rescue for Lehman.
Lehman’s failure did not begin the entire crisis: problems in subprime mortgages and credit markets had appeared earlier. It became a powerful symbol because its bankruptcy demonstrated how quickly stress at one major financial institution could spread through an interconnected system.