Frankfurt - The European Central Bank

Frankfurt - Shares on European markets nosedived on Monday in financial turmoil triggered by the collapse of one of the biggest US investment banks and the sale of another.

Lehman brothers filed for bankruptcy protection after frantic negotiations throughout the weekend failed to produce a buyer. Hours earlier, Merrill Lynch agreed to be bought out by Bank of America Corp for 50 billion dollars in stock.

Germany's blue-chip DAX fell 4 per cent, while the Paris bourse lost 4.9 per cent and the London Stock Exchange was down more than 4 per cent by mid-afternoon.

Frankfurt - Share prices tumbled in early trading in Europe on Monday as markets reacted to the financial turmoil triggered by the demise of US investment bank Lehman Brothers.

Germany's blue-chip DAX fell 2.8 per cent, while the Paris bourse lost nearly 3.5 per cent and the London Stock Exchange was down more than 2 per cent. In nearly all cases banking shares were hardest hit.

Traders in Frankfurt said there was no panic on the German market, noting that the 30-share DAX recovered slightly to 6,059 after slumping to 6,050 at the opening.

Frankfurt  - The European Central Bank (ECB) said Monday it was watching money market conditions closely in the eurozone, following indications that US bank Lehman Brothers would declare itself bankrupt.

The ECB said from its headquarters in Frankfurt it was ready to contribute to orderly conditions in the euro money market.

The US Federal Reserve said Sunday it was taking measures to stabilize conditions on financial markets, including accepting a wider range of financial instruments as collateral.

Berlin - Calls for pay restraint as major European economies slip into recession are falling on deaf ears, with workers in numerous countries grumbling that they have gained few of the promised fruits of the last upswing.

Earlier in September, European Central Bank (ECB) President Jean- Claude Trichet hammered out a warning against "second-round effects in price and wage setting," telling eurozone citizens to put up with high world prices for fuel and food which are beyond governments' control.

Paris - European aerospace giant EADS will not withdraw from the bidding for a 35-billion-dollar contract for new US air tankers after the Pentagon halted the competition, a company spokesman said Sunday.

"No decision has been taken regarding a withdrawal," Pierre Bayle told Deutsche Presse-Agentur dpa, refuting a report by the German news magazine Der Spiegel.

On Saturday, the magazine had quoted a senior EADS manager as saying the company would only submit a bid "if we are sure we will have a fair chance."