Lehman Brothers’ collapse on September 15, 2008, intensified the global financial crisis.
Lehman Brothers filed for bankruptcy after it could not secure a buyer or sufficient government support. At the time, it was the largest bankruptcy filing in U.S. history, with hundreds of billions of dollars in liabilities.
The firm had built substantial exposure to mortgage-related assets and was damaged by the collapse of the U.S. housing market. Its failure shocked markets because Lehman was deeply connected to banks, funds and trading partners around the world.
The bankruptcy did not start the entire crisis. Problems in subprime mortgages, structured finance and bank funding had already developed. However, Lehman’s failure greatly increased fears that other financial institutions could also fail, causing credit markets to seize up.