Which investment bank’s bankruptcy became the symbolic start of the 2008 financial crash?

Lehman Brothers’ bankruptcy became the symbolic start of the 2008 financial crash.

The investment bank filed for bankruptcy on September 15, 2008, after suffering enormous losses linked to U.S. mortgages and mortgage-related securities. It was the largest bankruptcy filing in U.S. history at the time, with hundreds of billions of dollars in assets.

Lehman’s failure intensified an already serious crisis. Banks and other institutions became less willing to lend because they could not tell which counterparties were exposed to troubled assets. Credit markets seized up, stock prices fell, and governments intervened to prevent further collapses.

The failure did not begin all of the underlying problems. The crisis had roots in the housing bubble, risky subprime lending, complex securitization, high leverage, and inadequate risk management. Bear Stearns had already been rescued in March 2008, while Merrill Lynch was sold to Bank of America shortly after Lehman failed.