It was in the early hours of Monday, September 15, five years ago, when US investment bank Lehman Brothers collapsed into bankruptcy, setting in train the worst financial crisis in living memory.

Once the fourth biggest investment bank in the world, it was the largest corporate failure in history and one that created an aftershock that tipped the banking sector into meltdown, sending the global economy into deep recession.

Five years later and major economies are only now beginning to regain their poise.

The UK is basking in a far rosier economic outlook than it has had for many years as the recovery finally gains traction, while the eurozone emerged from recession last month after a record 18 months of contraction.

America’s prospects have improved to such an extent that the US Federal Reserve is planning to scale back and end its mammoth quantitative easing (QE) drive that has been propping up growth since the dark days of the financial crisis.

Buoyed by money printing efforts worldwide, financial markets have staged an impressive turnaround, with the Dow Jones Industrial Average on Wall Street recently hitting all-time highs, while London’s FTSE 100 Index came within a whisker of its 6950.6 record level in May.

Fears over US plans to taper QE and the recent Syrian crisis have eased markets back a little, but they are still a picture of robust health when compared with the carnage suffered in the aftermath of the Lehman demise.

Major economies are only now beginning to regain their poise

Mega deals have returned to the fore as confidence has returned, with Vodafone’s $130 billion sale of its stake in Verizon Wireless marking the third largest deal in corporate history and one of a slew of mammoth transactions.

Soon after the Vodafone deal was unveiled, technology giant Microsoft announced a £4.7 billion acquisition of Nokia’s mobile phone arm, while computer firm Dell looks set to be taken private by founder Michael Dell in a drawn-out $24.8 billion buyout.

But there has been a lasting legacy of the Lehman failure and credit crunch, with many issues still remaining unresolved in the banking sector.

The recent capital crisis at The Co-operative Bank has underlined that banks are not out of the woods yet.

Bank of England Governor Mark Carney recently took care in stressing there was no “mission accomplished banner saying the banking system’s fixed’’, with a £27 billion black hole only recently discovered among Britain’s major lenders.

Royal Bank of Scotland remains firmly in public hands, while fellow bailed-out lender Lloyds Banking Group has only just readied itself for the Government to begin selling down its 39 per cent stake.

And for the UK economy, there is also a long way to go before returning to pre-crisis health.

Britain’s economy is producing three per cent less than it did five years ago, while Germany has grown by two per cent, the US by five per cent, Australia by 13 per cent and China by more than 50 per cent.

The Bank of England’s base interest rate remains at the emergency low of 0.5 per cent and will remain at such a level for at least three years, according to Carney’s new forward guidance pledge.

Lehman’s bankruptcy was compared to a “massive earthquake” by one dazed worker, walking out of the offices after its collapse five years ago.

Shocked employee Kirsty McCluskey added in comments to reporters outside: ‘‘It is terrible. Death.”

About 27,000 Lehman workers worldwide were left in shock and disbelief, while stock markets spiralled into the red amid investor panic.

The bank’s collapse led Wall Street to its worst points fall since the 9/11 terror attacks, with London’s FTSE 100 Index also plunging sharply.

But it was the aftermath of the Lehman bankruptcy that caused the most damage.

Terrified banks would barely lend to each other for more than 24 hours in what the then Governor of the Bank of England, Lord King, described as the worst crisis since World War I.

Every day that followed brought a new seismic event. On the Tuesday that week, US insurer AIG was given a taxpayer bailout, while the Wednesday saw a takeover of the UK’s Halifax Bank of Scotland by Lloyds TSB.

Meanwhile, markets sought the next vulnerable bank and settled on Bradford & Bingley. Aside from the sale of its savings business to Spain’s Santander, the Government soon found itself launching the second nationalisation in seven months.

But less than a month later, the Government was to complete a far more ambitious rescue move – announcing to a shocked market that it had agreed the terms of a historic bailout of the sector.

The Government said it would throw a taxpayer lifeline to three of the UK’s biggest banks – Royal Bank of Scotland, Lloyds TSB and HBOS – in a bid to end the sector’s turmoil.

Barclays instead turned to Middle East investors to avoid public support, although its fund-raising practices are now under investigation, while HSBC also took its own action to bolster capital strength.

While a raft of others in the US were saved by last-minute takeovers or government rescues – namely US investment bank Bear Stearns, mortgage giants Fannie Mae and Freddie Mac, AIG and Merrill Lynch – Lehman was in effect left to the dogs.

Brought down by its huge exposures in mortgage-backed investments and commercial property, Lehman’s chief executive Richard Fuld was unable to strike a deal.

Despite desperate pleas from Lehman, the then US Treasury Secretary and former Goldman Sachs boss Hank Paulson drew the line at a bailout, ending 158 years of history and starting a mammoth administration.

PricewaterhouseCoopers (PwC) was appointed administrator of the European and UK arm of Lehman Brothers – a task then described by lead partner Tony Lomas as being “10 times as large and more complicated’’ than the bankruptcy of Enron.

Since then, more than 500 Lehman staff and 200 PwC staff have been engaged on the administration at various points and work still continues.

The past five years have been a roller-coaster ride for the banking sector and the UK economy, but optimism over the recovery is running at its highest level since the Lehman collapse.

Government initiatives such as Funding for Lending, providing banks with access to cheap finance on the condition they lend more, and Help to Buy, allowing those with small deposits to buy properties, are helping shore up growth.

But the initiatives appear to be creating the perfect conditions for a housing market bubble, prompting many experts to warn over a damaging boom and bust cycle.

As Britain heads for another possible consumer borrowing binge, worries are mounting that few lessons have really been learned since the devastating events of five years ago.