Global stock markets plunged this morning after it emerged that Lehman Brothers, the 158-year old bank, had filed for bankruptcy after the failure of a weekend of rescue talks masterminded by US Government.
In London, the FTSE 100 index of leading blue chip companies fell by 154.2 points to 5,262.5 in early trading, reversing gains made at the end of last week when a chance to secure Lehman’s future remained.
In France, the CAC 40 index lost 2.48 per cent and Frankfurt’s DAX fell 1.55 per cent to 6,138.42 points.
The Bank of England stepped forward this morning and said it was “monitoring carefully conditions in sterling money markets and will take appropriate actions if necessary to stabilise those markets”.
Bank shares were predictably badly hit in early trading. Morgan Stanley was down almost 10 per cent in Frankfurt, while reports that the world’s biggest insurer, American International Group (AIG), was seeking rescue funding meant that its shares lost a third of their value on the German market.