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SINGAPORE: Governments and central banks in Europe and Asia rushed to calm jittery markets in the wake of news that the US investment bank Lehman Brothers had filed for bankruptcy protection after failing to secure much-needed capital.
Central banks in France, Germany and Britain said they will lend support should the latest banking failure severely disrupt trading.
Over the last few days, it became clear that the US government was not going to step in to help and when other big lenders like Bank of America and Barclays chose to walk away, the writing was on the wall.
Lehman is the largest and highest-profile casualty of the global credit crisis so far, and this also means a tough start to the week for markets all across the globe.
Analysts say the Wall Street bank's failure is likely to have long-term implications for markets around the world. There are fears that the crisis will get even worse after Bank of America announced a deal to take over Merrill Lynch.
Vice president of group wealth management at OCBC Bank, Vasu Menon, said: "Investors ought to be careful. I think there is value for long-term investors in this market.
"But I think in the short term, there's going to be a lot of volatility, there's going to be a lot of uncertainties, more credit concerns and that is going to be quite bad news for Asian bourses."
Lehman employs close to 3,000 staff in Asia and had expanded aggressively in Asia in the last two years, ramping up foreign exchange and investment banking operations in Singapore, Hong Kong and Mumbai.
- CNA/yt
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