Lehman Brothers filed for Chapter 11 on 15 September 2008 after weekend rescue talks at the New York Fed failed. It listed about $639 billion of assets and $61…
As a dry-goods store opened by Henry Lehman in 1844. By 1850 his brothers had joined, and cotton trading led the firm to New York.
In housing. Mortgage debt rose from 61% to 97% of GDP between 1998 and 2006. When prices stopped rising, defaults climbed.
Gross leverage was 31.7x in February 2008. A fall of about 3% in asset values could erase its capital.
That an investment bank can lose its funding in days. JPMorgan bought Bear with about $29bn of Fed financing.
Korean investment talks stalled, the stock fell to $7.79, and Lehman reported a $3.9bn quarterly loss.
Paulson, Geithner and Cox told bank chiefs there would be no public money. Barclays and Bank of America were the bidders.
Barclays had to guarantee Lehman's trading until a shareholder vote. The UK FSA would not waive the vote.
At about 1:45am on Monday 15 September 2008. It is still the largest bankruptcy filing in US history.
The Fed lent AIG up to $85bn for a 79.9% stake. One day after letting Lehman fail, Washington saved the insurer.
The Reserve Primary Fund held $785m of Lehman paper. About $300bn left prime money funds that week.
After the House first rejected it, Congress passed TARP. It was soon used to inject capital into banks.
New powers to wind down failing giants, living wills, stress tests and tougher capital and liquidity rules.
Not yet. London's LBIE closed after paying in full in Oct 2025; the parent's 32nd payout came in April 2026.
Read the complete story, FAQs and key facts.