Lehman Brothers’ collapse in September 2008 helped intensify the global financial crisis after the subprime mortgage crash.
Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008. With about $639 billion in assets, it was the largest U.S. corporate bankruptcy at that time. The filing followed losses tied to mortgage-related securities, falling property values, and the firm’s heavy exposure to leveraged real estate finance.
Lehman’s failure damaged confidence because financial institutions were deeply connected through lending and derivatives contracts. Banks became less willing to lend to one another, credit markets tightened, and governments and central banks took emergency measures to prevent further collapse.
Lehman was not the only major institution in trouble. Bear Stearns had been rescued earlier in 2008, while Merrill Lynch was acquired by Bank of America and AIG received government support. The crisis also spread internationally through banks and markets around the world.