Which U.S. investment bank’s collapse became the largest bankruptcy in 2008?

Lehman Brothers’ collapse became the largest bankruptcy in the United States in 2008.

The investment bank filed for Chapter 11 bankruptcy protection on 15 September 2008, listing more than $600 billion in debt. Lehman had built a large business in mortgage-related securities and became highly exposed to the weakening U.S. housing market. Losses on subprime mortgages and other assets damaged confidence in the firm’s balance sheet.

Authorities and potential buyers had explored ways to rescue or sell Lehman, but no deal was completed. Its failure intensified the global financial crisis because banks and investors became less willing to lend to one another. Stock markets plunged, credit markets froze, and governments responded with emergency lending, guarantees, and recapitalization programs.

Lehman’s failure is often described as the trigger for the most acute phase of the 2008 crisis, but it was not the original cause. Housing speculation, mortgage lending practices, leverage, securitization, and weak risk controls had built up for years before the bankruptcy.