Lehman Brothers’ bankruptcy in 2008 became the largest in US history and intensified the global financial crisis.
The investment bank filed for Chapter 11 bankruptcy protection on September 15, 2008. Its filing listed more than $600 billion in assets, making it an exceptional failure even in a crisis already marked by major financial losses. Lehman had been heavily exposed to the US housing and mortgage markets.
When the housing bubble burst, mortgage-related securities lost value and confidence in highly leveraged institutions weakened. Lehman could not secure a buyer or sufficient government support, and its collapse caused severe stress in credit markets worldwide.
Lehman’s failure is often described as a turning point, but it was part of a broader crisis. Bear Stearns had been rescued earlier in 2008, while Washington Mutual later became the largest US bank failure. Lehman was an investment bank, not a commercial bank, which is a common point of confusion.