Lehman Brothers’ failure became a central event in the 2008 global stock-market crash.
Lehman Brothers filed for bankruptcy protection on September 15, 2008, in the largest bankruptcy filing in U.S. history at that time. The investment bank was heavily exposed to mortgage-related assets and could not secure a private rescue or government-supported acquisition.
Its collapse intensified fears about the solvency of banks and the safety of financial markets. Credit markets seized up, share prices fell around the world, and governments introduced emergency lending, guarantees, and recapitalization measures. The failure followed the earlier rescue of Bear Stearns and preceded the government bailout of American International Group.
Lehman did not single-handedly create the housing and credit crisis. Years of risky mortgage lending, securitization, leverage, and weak risk controls had built a fragile system. Its bankruptcy was the dramatic failure that made the crisis global and unmistakable.