Lehman Brothers’ collapse became the symbolic start of the 2008 global financial crisis.
The investment bank filed for Chapter 11 bankruptcy protection on September 15, 2008, after suffering enormous losses connected to mortgage-backed securities and real-estate lending. Its filing was the largest corporate bankruptcy in United States history at that time, with more than $600 billion in assets listed.
Lehman’s failure shocked financial markets because the firm was deeply connected to banks, funds, and trading counterparties around the world. Credit markets tightened, and confidence in major financial institutions deteriorated rapidly. The crisis had already developed before Lehman failed, particularly through the collapse of the US housing bubble and earlier problems at Bear Stearns.
Lehman was not rescued by the US government. Merrill Lynch was instead sold to Bank of America, while the American International Group received emergency support. The crisis later produced the Troubled Asset Relief Program and a severe global recession.