Lehman Brothers was the institution whose 2008 bankruptcy became a defining trigger of the global financial-market crash.
The investment bank filed for bankruptcy on September 15, 2008, after failing to find a buyer or secure sufficient government support. Lehman had accumulated large exposures to mortgage-related assets and commercial real estate. Its failure was the largest bankruptcy filing in U.S. history at that time and immediately intensified fears about the safety of financial institutions.
The bankruptcy did not start the crisis by itself. Problems in U.S. subprime mortgages, structured securities, bank leverage, and short-term funding had already spread through financial markets. Nevertheless, Lehman’s collapse caused severe disruption in credit markets and accelerated worldwide stock-market falls. Bear Stearns had been rescued earlier in 2008, while Merrill Lynch was acquired by Bank of America, making their outcomes different from Lehman’s bankruptcy.