Lehman Brothers’ September 15, 2008, bankruptcy became a landmark of the global financial crisis.
Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection in the United States on September 15, 2008. It was the largest bankruptcy filing in U.S. history at that time. The firm had built a large exposure to mortgage-related securities and real estate, and confidence in its finances collapsed as losses mounted and potential rescue deals failed.
Lehman’s failure intensified fear throughout global financial markets. Banks became less willing to lend to one another, credit markets seized up, and stock exchanges around the world fell. Bear Stearns had already been rescued in March 2008, while Merrill Lynch agreed to be acquired by Bank of America on the same day as Lehman’s filing. Lehman’s bankruptcy was therefore a crucial escalation, not the beginning of every problem in the crisis.