Investors around the world are closely watching the status of big US banks Lehman Brothers and Merrill Lynch as fears of the continuing fall-out from the credit crunch sweep markets.
Investors around the world are closely watching the status of big US banks Lehman Brothers and Merrill Lynch as fears of the continuing fall-out from the credit crunch sweep markets.
Takeover talks between Barclay’s Bank and Lehman Brothers broke down over the weekend, leaving many commentators concerned that Lehman will soon file for bankruptcy. The fallout of this move would be huge. Banks around the world would be likely to further tighten their lending criteria, which would exacerbate the credit crunch and the global slowdown already underway. “It’s a new financial world on the verge of a complete reorganisation,” one US fund manager said this morning.
Another US banking giant, Merrill Lynch, is reportedly set to be taken over by Bank of America, which was offered $US44 billion for the ailing Merrill. The faltering giant has been hit hard by the credit crisis and has written down more than $US40 billion over the last year.
The Australian market has been sold off sharply this morning as investors fret about US situations.
The benchmark S&P/ASX200 index was down 103.6 points or a whopping 2.1% at 4800.3 at 12.35pm AEST.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
