Which U.S. investment bank failed in 2008 after losses tied to subprime mortgages?

Lehman Brothers failed in 2008 after losses tied to subprime mortgages.

Lehman Brothers filed for Chapter 11 bankruptcy on 15 September 2008. Before its collapse, the investment bank had built substantial exposure to real estate, mortgage-related securities, and highly leveraged financing. Falling U.S. house prices caused the value of many of those assets to decline.

The bank’s failure was especially destabilizing because Lehman was deeply connected to other financial institutions. Its bankruptcy made lenders more fearful of counterparty risk and contributed to a severe freezing of credit. Stock markets fell as investors reassessed banks, insurers, and the wider economy.

Bear Stearns is a common alternative answer because it also failed during the crisis, but it was rescued by JPMorgan Chase in March 2008. Merrill Lynch was acquired by Bank of America, while Morgan Stanley survived after changing its status and receiving additional support.