Lehman Brothers’ bankruptcy became a major trigger of the 2008 global financial crisis and the associated stock-market crash.
The investment bank filed for Chapter 11 bankruptcy protection on September 15, 2008. It was the largest bankruptcy filing in United States history at that time, with more than $600 billion in assets. The failure followed heavy exposure to mortgage-related assets and a collapse in confidence among lenders and investors.
Lehman’s failure intensified concerns about counterparty risk: financial institutions could no longer easily judge which firms might be weakened by housing-market losses. Credit markets seized up, and stock prices fell around the world. Governments and central banks responded with emergency lending, guarantees, rescues, and later large-scale monetary support.
Lehman was not the only important event of the crisis. Bear Stearns had required rescue earlier in 2008, while Washington Mutual failed shortly afterward. Still, Lehman’s disorderly collapse is widely treated as the crisis’s decisive escalation point.