FTSE 100 plummets as fourth-largest US bank files for bankruptcy

One of the largest banks in the world has filed for bankruptcy, causing turmoil in the global financial markets.

Lehman Brothers, the fourth-largest bank in the US, announced during the night that it would be seeking protection from its creditors after suffering billions of dollars of losses through the mortgage market. A possible acquisition deal by Barclays fell through early this morning.

The collapse of Lehman Brothers is expected to have a ripple effect across international financial markets, with share prices predicted to plummet throughout the day on European trading floors.

The FTSE is expected to fall 100 points on opening this morning.

Over the weekend another bank, Merrill Lynch, agreed to being taken over by rival Bank of America for $50bn (£28bn).