Which investment bank’s bankruptcy became a defining moment of the 2008 crash?

The investment bank whose bankruptcy became a defining moment of the 2008 crash was Lehman Brothers.

Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. It was the largest bankruptcy filing in U.S. history at the time, with hundreds of billions of dollars in assets. The filing intensified an already severe crisis in credit markets and damaged confidence in financial institutions worldwide.

Lehman had built large exposures to the U.S. housing market through mortgages and mortgage-related securities. As house prices fell and mortgage defaults rose, the value and liquidity of those assets came under pressure. The firm could not secure a buyer or sufficient government-supported rescue before filing.

The bankruptcy did not begin the entire crisis. Bear Stearns had required a rescue earlier in 2008, and housing and credit problems had been developing for years. Lehman’s failure became a powerful symbol because of its scale and the shock that followed.