Wall Street shaken by Lehman failure and Merrill sale
The ruptured U.S. financial system faces an unprecedented shakeup with Lehman Brothers filing for bankruptcy, Bank of America buying Merrill Lynch and the Federal Reserve saying for the first time it will accept stocks in exchange for cash loans.
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 U.S. housing bust.
"The U.S. financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
"It's a new financial world on the verge of a complete reorganization."
AP
The ruptured U.S. financial system faces an unprecedented shakeup with Lehman Brothers filing for bankruptcy, Bank of America buying Merrill Lynch and the Federal Reserve saying for the first time it will accept stocks in exchange for cash loans.
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 U.S. housing bust.
"The U.S. financial system is finding the tectonic plates underneath its foundation are shifting like they have never shifted before," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
"It's a new financial world on the verge of a complete reorganization."
AP
