Lehman Brothers’ collapse became the defining trigger of the 2008 global financial crisis.
The investment bank filed for bankruptcy on September 15, 2008, after suffering enormous losses connected to U.S. mortgages and mortgage-related securities. With assets of roughly $639 billion, it was the largest bankruptcy filing in U.S. history at the time.
Lehman’s failure intensified fear throughout financial markets because banks and other institutions were uncertain about their exposure to one another. Credit markets tightened, stock prices fell sharply, and governments responded with emergency lending, guarantees, and capital injections.
Bear Stearns had already been rescued and sold to JPMorgan Chase in March 2008, while Merrill Lynch agreed to be acquired by Bank of America. Those earlier events were important, but Lehman Brothers was the institution whose bankruptcy became the crisis’s central turning point.