Lehman files for bankruptcy protection
Lehman Brothers has filed for bankruptcy protection to become the third top American investment bank to depart the scene in six months.
(Mon, 15 Sep - Press TV) The US fourth largest bank collapsed under the weight of toxic assets, mainly related to real-estate that are now worth only a fraction of their original prices.
The ruptured US financial system faces an unprecedented shakeup with Lehman filing for bankruptcy, the Bank of America buying Merrill Lynch and the Federal Reserve saying for the first time it will accept stocks in exchange for cash loans.
UK's Barclays had originally planned to buy it, but walked away in last minute talks after the government refused to bail it out.
Officials say Lehman will now be sold off piecemeal. And its collapse is feared to strongly undermine the US financial system and deepen the credit crisis.
Lehman will become Wall Street's highest profile bankruptcy since junk bond specialist Drexel Burnham Lambert succumbed in 1990.
On a black Sunday for Wall Street, 10 of the world's biggest banks also agreed to establish a $70 billion emergency fund, with any one of them able to tap up to a third of that.
Separately, troubled insurer American International Group asked the Fed for a lifeline, according to news reports.
The events, which followed three days of talks between bank CEOs and regulators at the Fed's fortress-like Manhattan building, indicate that Wall Street and Washington were accepting that massive triage is needed in the face of the credit crisis and US housing bust.