Which investment bank filed for the largest bankruptcy in U.S. history in 2008?

Which investment bank filed for the largest bankruptcy in U.S. history in 2008? Lehman Brothers. Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection on September 15, 2008, after efforts to find a buyer or government-backed rescue failed.

The firm had accumulated substantial exposure to the U.S. housing market, including mortgage-related securities and real-estate investments. As housing prices fell and credit markets tightened, investors became increasingly concerned about Lehman’s balance sheet and its ability to raise funding. The bankruptcy filing listed more than $639 billion in assets and became the largest U.S. bankruptcy filing by assets at the time.

Lehman’s collapse intensified the global financial crisis. It occurred one day after Bank of America agreed to acquire Merrill Lynch, while the Federal Reserve and Treasury were dealing with the failing insurer AIG. Unlike AIG, Lehman did not receive a comparable federal rescue before filing.

A common mix-up is Bear Stearns, which failed earlier in 2008 and was acquired by JPMorgan Chase with Federal Reserve assistance. Merrill Lynch was also rescued through a merger. The record-breaking bankruptcy points specifically to Lehman Brothers Holdings Inc.