Which investment bank’s collapse became the pivotal event of the 2008 financial crisis?

Lehman Brothers’ collapse became the pivotal event of the 2008 financial crisis.

Lehman Brothers filed for bankruptcy on September 15, 2008, after suffering enormous losses connected to the United States housing market and mortgage-related securities. Its failure was the largest bankruptcy filing in U.S. history at that time and sent shock waves through global financial markets.

The crisis had begun earlier, with falling house prices, rising mortgage defaults, and losses at financial institutions exposed to complex housing-linked assets. Lehman’s bankruptcy intensified doubts about the solvency of banks and the reliability of short-term credit markets.

The collapse is often described as the single cause of the crisis, but that is too simple. It was a major escalation inside a broader sequence of events that included the rescue of Bear Stearns, the government takeover of Fannie Mae and Freddie Mac, and the rescue of insurer AIG.