Lehman Brothers’ bankruptcy intensified the 2008 global financial crisis and triggered a worldwide market sell-off.
Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. At the time, it was the largest bankruptcy filing in U.S. history. The firm had accumulated major exposure to mortgage-related securities and real-estate lending, and investors feared that its collapse would spread through the global financial system.
The failure followed the rescue of Bear Stearns in March 2008 and came shortly before the government-supported sale of Merrill Lynch to Bank of America. Unlike those firms, Lehman did not receive a rescue that prevented bankruptcy.
The bankruptcy did not start the subprime mortgage crisis, which had already caused serious losses, but it sharply increased uncertainty and froze credit markets. A common mistake is to call Lehman a stock-market crash itself; it was a major event within the wider financial crisis and market collapse.