…And the global financial crisis deepens. Can it get any worse?
Soon I might need to think seriously about getting a second job!
Via BBC News
The fourth-largest investment bank in the US, Lehman Brothers, has filed for bankruptcy protection, amid a growing global financial crisis.
Lehman had incurred losses of billions of dollars in the US mortgage market.
The move threatens to deal a further blow to the global financial system, as banks unwind their deals with Lehman.
Merrill Lynch, also stung by the credit crunch, has agreed to be taken over by Bank of America in a dramatic weekend of events for Wall Street.
Its impact is being felt around the world:
Stock markets and the US dollar have tumbled in reaction to Lehman’s collapse, with banking shares hardest hit. UK bank HBOS saw its shares plummet 30%.
Central banks have moved to reassure markets. The US Federal Reserve has broadened its emergency lending scheme and the UK and European central banks have injected a total of $39bn (£22bn; 28bn euros) into the financial system.
There are fears AIG, once the world’s largest insurer, could also face collapse. It is taking steps to raise money amid reports it is seeking a $40bn emergency loan from the Fed.
Bank of America’s move to buy Merrill in a $50bn deal means that three of the top five US investment banks have fallen prey to the sub-prime crisis within six months.
In the UK, accountants PricewaterhouseCoopers have been appointed as administrators for Lehman.
Categories: These are hard times