Markets dive following Lehman bankruptcy

Source: Exec Digital UK

Date :15/09/2008 10:56:07

Global stock markets plunged after it emerged that Lehman Brothers had filed for bankruptcy following the breakdown of rescue talks.

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 the outlook for Lehman was much brighter.

The Bank of England, concerned by these developments, has said it is monitoring the situation “carefully” and will take appropriate actions if necessary.

Playing tough

Lehman rescue talks broke down after the US government, which bailed out Fannie Mae and Freddie Mac a week ago, refused to provide a similar financial backstop to Lehman’s potential buyers. Without such support, Barclays plc and Bank of America, the two most interested buyers, walked away.

Lehman said it intends to file for protection under Chapter 11 of the US Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York.