The U.S. investment bank that filed for bankruptcy on September 15, 2008, deepening the global crash was Lehman Brothers.
Lehman had built a large business in mortgage-related securities and real-estate finance. As U.S. house prices fell and mortgage defaults increased, the value of those assets became uncertain. Investors and counterparties lost confidence in the firm’s ability to raise funding and meet its obligations.
Lehman Brothers filed for Chapter 11 bankruptcy protection with more than $600 billion in assets, making it the largest bankruptcy filing in U.S. history at the time. The failure intensified panic in credit markets because financial institutions were unsure which firms held troubled assets or faced exposure to Lehman.
Bear Stearns had already been rescued and sold to JPMorgan Chase in March 2008, while Merrill Lynch agreed to be acquired by Bank of America at the same time as Lehman’s collapse. Those events are often grouped together, but Lehman was the bank that filed for bankruptcy.