Lehman Brothers filed for bankruptcy on September 15, 2008, becoming a symbol of the global financial crash. At the time, it was the largest bankruptcy filing in United States history, with more than $600 billion in assets listed.
Lehman had built a major business in mortgage-backed securities and real-estate finance. As U.S. house prices declined and mortgage defaults increased, the value of many related assets fell. The firm struggled to raise capital or find a buyer, and negotiations with potential rescuers did not produce a deal.
The bankruptcy intensified an already severe credit crisis. Financial institutions became more cautious about lending to one another, markets fell sharply, and governments introduced emergency measures to stabilize the banking system. The failure was followed immediately by the sale of Merrill Lynch to Bank of America and by further turmoil at other financial companies.
Lehman Brothers is often remembered as the single event that “caused” the entire crisis, but problems had already developed across the U.S. housing and credit markets. Its collapse instead acted as a powerful escalation point and public symbol.