LEHMAN BROTHERS, the fourth biggest bank in the US, announced it was bankrupt on Monday.
The news, plus that of the troubles facing Meryl Lynch, who were eventually saved at the last minute by Bank of America, triggered panic among the world’s stock exchanges over fears for the world economy.
The markets reacted to the banking turmoil in the US by registering huge losses in the first few days of the week.
Oil prices also began to slide, reaching its lowest price in more than six months. Brent crude traded below 90 dollars a barrel on Tuesday.
In an attempt to stabilise matters, central banks in Europe and Asia were forced to inject billions of dollars to sustain the financial systems.
Many remembered the crash of 1929 and the US president, George Bush, called on investors to calm down.
Meanwhile, Barclays Bank, reported to be in the running to buy Lehmans, announced on Tuesday that although it was no longer interested in the business, it was still interested in its assets.
According to the latest official figures, the assets are worth more than 421 billion euros (around 600 billion dollars).
Lehman Brothers holding announced it would be filling in the Chapter 11 bankruptcy petition on September 15.
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