Lehman Brothers became the symbolic turning point of the global financial crisis when it filed for bankruptcy on September 15, 2008.
The firm had grown heavily exposed to the United States housing market, especially mortgage-related securities. As house prices fell and mortgage defaults increased, investors became less willing to finance Lehman’s balance sheet. The company could not secure a buyer or sufficient government support.
Lehman’s bankruptcy was the largest in United States history at that time. Its failure intensified panic in credit markets because banks and investors were uncertain about which institutions were exposed to Lehman and its trading partners. Interbank lending became more difficult, and stock markets fell sharply around the world.
The collapse was not the only cause of the crisis. Bear Stearns had already been rescued in March 2008, while the government later supported AIG and other institutions. Lehman’s failure is remembered because it demonstrated how quickly financial stress could spread internationally.