Lehman Brothers’ bankruptcy on September 15, 2008 intensified the global financial crisis.
Lehman Brothers filed for Chapter 11 bankruptcy protection after failing to find a buyer or secure a government-backed rescue. With about $639 billion in assets, it was the largest bankruptcy filing in United States history at that time.
The firm had accumulated large exposures to mortgage-related securities and suffered as the American housing market collapsed. Its failure shocked financial markets because Lehman was deeply connected to banks, investment funds, and other institutions worldwide.
The bankruptcy was not the beginning of the crisis: mortgage losses and the failure or rescue of other institutions had already caused severe stress. However, Lehman’s collapse sharply increased fears about counterparty risk and helped trigger a global freeze in credit markets.