Lehman Brothers’ September 2008 bankruptcy sharply intensified the global financial-market crash.
Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. At the time, it was the largest bankruptcy filing in U.S. history. The investment bank had been heavily exposed to mortgage-related assets and had struggled as housing prices fell and credit markets deteriorated.
The filing shocked investors because authorities had allowed Lehman to fail after earlier interventions involving other financial institutions. Confidence in banks and money markets weakened rapidly. Stock markets around the world fell, and governments and central banks introduced emergency measures to prevent a wider collapse.
Lehman was not the original cause of the housing and credit problems. Instead, its failure became a major escalation point in the 2008 crisis. Bear Stearns had already been rescued and sold to JPMorgan Chase in March 2008, while Merrill Lynch agreed to be acquired by Bank of America at the same time as Lehman’s failure.