Lehman Brothers' bankruptcy is widely identified as the key flashpoint of the 2008 financial crisis.
Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. At the time, it was the largest bankruptcy filing in United States history. The firm's collapse sharply intensified fear about the health of banks and financial institutions around the world.
Lehman had become heavily exposed to mortgage-related securities and real estate finance. As U.S. housing prices fell and subprime mortgage defaults rose, the value of those assets became increasingly uncertain. Lehman's losses and funding problems made it difficult to maintain confidence or secure a rescue.
The bankruptcy was one event in a broader crisis involving excessive leverage, complex securitization, weak underwriting, and fragile short-term funding. Bear Stearns had already been rescued in March 2008, while Merrill Lynch was sold to Bank of America. The Lehman failure was followed by emergency government interventions, including the U.S. Troubled Asset Relief Program.