Lehman Brothers was the U.S. investment bank whose 2008 bankruptcy became the largest in American history and deepened the stock-market crash.
Lehman filed for bankruptcy on September 15, 2008, after suffering enormous losses connected to the collapse of the U.S. housing market and mortgage-related securities. The filing followed the failure of efforts to find a buyer or secure sufficient government support.
The bankruptcy intensified fear about counterparty risk and the health of other financial institutions. Credit markets seized up, stock prices fell, and governments worldwide introduced emergency lending, guarantees, capital injections, and stimulus measures. The crisis became a global recession.
Lehman’s failure was not the only cause of the crash. Earlier housing and credit stresses, excessive leverage, weak underwriting, and interconnected financial products had already made the system fragile. Lehman became the most recognizable symbol of the breakdown.