Q. Why has Lehman Brothers collapsed.

It was one of the most exposed banks to the US sub-prime mortgage market. It did not give out

mortgages to ordinary American citizens. Rather, it bought up billions of dollars worth of

These loans from US banks, re-packaged them, and sold them on to global.

Q. Why has Lehman Brothers collapsed.

It also invested heavily in property, both commercial and residential. With the US housingmarket in free-fall these re-packaged loans and its property portfolio have plummeted in

value. In June to August last year, the bank said it would write off $700 million (£390million), from its balance sheet as a result.

In the same three months this year, this figure soared to $7.8 billion (£4.34 billion). The bank tried to

sell itself but no one – including the UK's Barclays – was willing to take on these "toxic" assets

Q. Could others follow Lehman Brothers?A. Yes. Merrill Lynch, one of the most venerable Wall Street firms, has been

bought out by the Bank ofAmerica to save it going under. AIG, the world's largest insurance company

is also running short offunds, it is understood. It is almost certain another major financial

institution will collapse

Why does it matter that Lehman has collapsed and others are in trouble?A. Lehman does not have any High Street branches, ordinary savers or mortgage customers.

However,its collapse will have profound implications for people around the world – and not just for its 25,000

staff, 5,000 of them in the UK who are almost certainly out of a job.Crucially, the US's central bank, the Federal Reserve has refused to step in to rescue the firm, even

though it bailed out Bear Stearns, Fannie Mae and Freddie Mac earlier this year. This has rattled Wall

Street and the City as investors realise that others could be allowed to go to the wall.As a result, share prices have fallen heavily on stock markets around the world

CHRONOLOGY OF EVENTS(NEWYORK LOCAL TIME)FRIDAY

16:00: U.S. market closes after a see saw session dominated by the fate of Lehman Brothers. After initially opening 140 points down in the wake of disappointment that

Lehman had not secured a rescue by early Friday, the Dow Jones Industrials index recovered and closed down just 10 points.

16:25: Sources say Lehman Brothers has received bids for its asset management division from private equity firms Clayton Dubilier & Rice and Bain Capital.

20:00: U.K. newspapers say Barclays is considering a bid for Lehman Brothers

CHRONOLOGY OF EVENTS(NEWYORK LOCAL TIME)SUNDAY

12:00 The rest of Wall Street's banks and brokers are called into work to start addressing Lehman Brothers outstanding trades in the over-the-counter derivatives markets.

12:57: Barclays says it is pulling out of its bid for Lehman Brothers15:11: Newspaper reports say AIG is seeking to raise between $10bn and $20 billion from buyout investors including

Kohlberg Kravis & Roberts and J.C Flowers & Co to bolster its balance sheet.15:45: Bank of America says it is pulling out of talks to acquire Lehman Brothers

16:18 : The Wall Street Journal reports that Bank of America and Lehman Brothers are in merger talks22:00: A global consortium of 10 banks announces it is provide a total of $ 70bn for a U.S. borrowing facility aimed at

providing liquidity.

CHRONOLOGY OF EVENTS(NEWYORK LOCAL TIME)MONDAY

00:32: Lehman Brothers announces it is filing for bankruptcy.00:36: Bank of America announces takeover of Merrill Lynch for

$50 billion.

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PREPARED BYKKTV

INPUTS FROM VARIOUS NEWS AGENCIES.