European banks brace for Wall Street ills

LONDON, Sept. 15 (UPI) -- Major banks in Europe said they were prepared to intervene to stabilize markets in the wake of the financial upheaval on Wall Street.

The European Central Bank in a statement said it was "ready to contribute to orderly conditions in the euro money market," indicating a concern that U.S. financial market woes could move into Europe, The New York Times said.

Investment broker Lehman Brothers' Chapter 11 bankruptcy filing, combined with the potential insolvency of insurance giant AIG, could threatens global financial institutions with new losses, the Times said.

The Bank of England said in a statement it would be "monitoring carefully the conditions in sterling money markets and will take appropriate actions if necessary to stabilize those market."

European bank officials said they were concerned about a repeat of August 2007, when fears of losses tied to the U.S. mortgage crisis prompted banks to curb lending to one worldwide, the Times reported.

European stock markets fell Monday, with bank shares dropping dramatically. In Zurich, leading bank stocks were down by as much as 7.7 percent. The FTSEurofirst 300 index of leading European shares was off 3.1 percent.