Bangkok (AsiaNews) – Asian stock markets are down this morning in the wake of the news that Lehman Brothers, the fourth largest US investment bank is filing for bankruptcy. Over 3 thousand employees in Asian branches of the bank are nervously awaiting news of their fate.
Lehman had incurred losses of billions of dollars in the US mortgage market. The chance of the bank’s collapse increased sharply after the strongest potential buyers Barclays and Bank of America pulled out at the weekend. At the moment of publishing this article Asian stock markets had already lost 2%. Many observers believe Lehman’s bankruptcy will result in a global “tidal wave” in world finance.
Among other factors in its collapse was US Treasury Secretary Henry Paulson’s refusal to use government money to bail Lehamn out of its crises. The government had already sponsored the recovery of mortgage giants Freddie Mac and Fannie Mae.
Merrill Lynch, also stung by the credit crunch, was also taken over this weekend by Bank of America.