Lehman Brothers' September 2008 bankruptcy is widely seen as a pivotal moment in the global financial crisis.
Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy on 15 September 2008. With liabilities of about $619 billion, it was the largest bankruptcy filing in U.S. history at that time. The failure immediately raised fears that financial institutions were deeply interconnected and that losses linked to mortgages could spread throughout the banking system.
Lehman had built a large business around mortgage-related securities and had substantial exposure to the United States housing market. As house prices fell and defaults increased, the value of many such assets became uncertain. Lehman's inability to secure a buyer or government rescue intensified the panic.
The bankruptcy did not begin the financial crisis, which had roots in the housing and credit booms. However, it accelerated the crisis dramatically. The following weeks brought emergency rescues, government guarantees, frozen credit markets and a sharp worldwide stock-market decline. Lehman's collapse is therefore often used as a date marker for the crisis's most acute phase.