Lehman Brothers’ bankruptcy became the largest in U.S. history and intensified the 2008 global financial crash.
The investment bank filed for Chapter 11 bankruptcy protection on September 15, 2008, after suffering enormous losses linked to mortgage-related securities and real-estate lending. Its failure followed the collapse or rescue of other financial institutions and signaled that a major Wall Street firm could disappear rather than receive a direct bailout.
Lehman’s bankruptcy disrupted confidence in short-term lending and financial counterparties around the world. Credit markets tightened, stock prices plunged, and governments and central banks introduced emergency measures. The event did not begin the subprime crisis, which had already been developing, but it sharply accelerated the panic.
Lehman is often confused with Bear Stearns, which was rescued and sold to JPMorgan Chase in March 2008. Washington Mutual failed later in September and was the largest U.S. bank failure, but Lehman was the largest U.S. corporate bankruptcy at the time.