Bryan McAllister’s personal reference notebook
September 12, 2026Short & citedBlog
Civic Viewpoint.
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Kept by Bryan McAllister — short guides, clear facts, and the Canadian angle when it matters.
Money & Work • Finance

Lehman Brothers

Lehman Brothers was a major U.S.

Updated September 12, 20261 min readCited sources

Lehman Brothers was a major U.S. investment bank that collapsed in 2008. Its bankruptcy became a defining event of the global financial crisis.

What it was

Lehman Brothers began in the 1840s in Montgomery, Alabama, as a dry-goods store serving cotton farmers. It evolved into a cotton brokerage and eventually a leading Wall Street investment bank, headquartered in New York City.

Why it collapsed

In the years before its failure, Lehman increased its exposure to subprime mortgages and other illiquid assets. Mounting losses and a loss of confidence led to its Chapter 11 bankruptcy filing on September 15, 2008.

Legacy and impact

Lehman Brothers' collapse intensified the 2008 global financial crisis and became a symbol of systemic risk. In Canada, the crisis prompted regulatory discussions and affected markets and financial institutions.

In short

  • Lehman Brothers started as a small dry-goods business before becoming a top investment bank.
  • It filed for Chapter 11 bankruptcy on September 15, 2008.
  • Its collapse is linked to heavy exposure to subprime mortgages.
  • Barclays acquired its North American businesses after the bankruptcy.
Canadian angle

Lehman Brothers' collapse affected Canadian markets and financial institutions as part of the global 2008 financial crisis, which also influenced Canadian regulatory and economic discussions.

Quick questions

What was Lehman Brothers?
Lehman Brothers was a U.S. investment bank and financial services firm that became one of the largest Wall Street institutions before collapsing in 2008.
Why did Lehman Brothers collapse?
Its collapse is linked to heavy exposure to subprime mortgages, mortgage-backed securities, and other illiquid assets during the financial crisis.
What happened to Lehman Brothers' business after the bankruptcy?
Barclays acquired Lehman Brothers' North American businesses in 2008.

Sources

  1. Harvard Business School Library — https://www.library.hbs.edu/special-collections-and-archives/exhibits/lehman/introduction
    Supports: Founding history, evolution from general store to major investment bank, and role of derivatives and subprime mortgages in the collapse.
  2. Barclays — https://home.barclays/archive-barclays/founding-banks/lehman-brothers/
    Supports: Early history in Montgomery, Alabama, and Barclays' acquisition of Lehman Brothers' North American businesses in 2008.
  3. Wikipedia — https://en.wikipedia.org/wiki/Lehman_Brothers
    Supports: Bankruptcy date, subprime-mortgage exposure, and general overview of the firm.
  4. Reuters — https://www.reuters.com/article/business/factbox-five-facts-about-lehman-brothers-past-and-present-idUSN09308605/
    Supports: Founding timeline, growth, and bankruptcy context.