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The aftershocks of Lehman Brothers' collapse continue to rock London this morning, with the FTSE 100 down 5.25 per cent at 12:03BST.

The index was down to 5,132.40 – a fall of 284.30 points – as confidence was shaken by the filling for bankruptcy of the four-largest investment bank, the sale of Merrill Lynch to Bank of America, and the revelations of emergency loans to insurer AIG.

Plans for a $70 billion emergency fund from the world's ten largest banks has done little to ease pressure – increasing fears further crises are on the horizon.

As a part of the deal, Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, and UBS have all put $7 billion into a fund, that they can each borrow up to a third from in the event of emergency.

In London at lunchtime, no shares on the FTSE 100 recorded price rises and HBOS lost 36.67 per cent of its value as pressure was heaped in financial stocks.

Royal Bank of Scotland dropped 18.33 per cent and Barclays dropped 18.18 per cent.

Investment specialist Man Group dropped 12.96 per cent, and just when everyone could do with a good drink Enterprise fell 11.88 per cent.

In Paris a similar story was seen, with the Cac 40 down 5.60 per cent – with double digit fall for Societe General, Credit Agricole, Axa and BNP Paribas.

Frankfurt's Dax was down 4.24 per cent – with financial stocks likewise rocked.

Eyes now turn to New York when Wall Street opens this afternoon. It is feared further losses on the NYSE could led to another round of losses tomorrow.