Lehman Brothers collapsed on September 15, 2008, becoming a defining moment of the global financial crisis.
Lehman was the fourth-largest investment bank in the United States when it filed for Chapter 11 bankruptcy protection. Its balance sheet was heavily exposed to mortgages and other real-estate-related assets. As housing prices fell and credit markets deteriorated, investors and counterparties increasingly doubted the firm’s ability to meet its obligations.
Lehman’s failure intensified panic in financial markets because it was deeply connected to banks, funds, and trading partners worldwide. The event is often mistakenly treated as the beginning of the entire crisis: serious stress had already appeared in the U.S. housing and credit markets, and Bear Stearns had failed earlier in 2008. Lehman’s bankruptcy nevertheless marked a dramatic escalation and was followed by extraordinary government and central-bank interventions.