The heads of the Russian central bank, the finance ministry and the financial market regulator met on Tuesday night for an emergency discussion on ways to halt the crisis. Earlier, trading had been suspended on both the Micex and RTS stock exchanges as investors ignored assurances by Russian officials and a cycle of distrust set in amid liquidity fears.

Margin calls forced domestic traders to liquidate positions and brokers pulled credit lines. At least one Moscow bank failed to meet payments. The rouble-denominated Micex Index closed 17.75 per cent down, the sharpest one-day drop since the August 1998 financial crisis, while the dollar-denominated RTS index closed down 11.47 per cent, its lowest level since January 2006.

Shares in Russia's biggest state-controlled banks led the slide with Sberbank, the state-controlled savings bank, closing 21.72 per cent down and VTB losing 29.26 per cent. The bank was suffered on investor fears about its securities portfolio, which makes up about 10 per cent of its assets.

New figures show that overall inflation has risen to 4.7 per cent this year but when only everyday goods are taken into account the rise in the cost of living is far higher, it has been revealed. THE COST OF SHOPPING BASKET ESSENTIALS IS RISING 25 PER CENT A YEAR, MailOnline's Cost Of Living Index for September shows. And as the bills grow, many families are investigating cheaper foreign destinations, a separate survey found.

Record numbers are leaving the UK to settle abroad. In the 12 months to June, 406,000 left to live overseas - the highest level since records began. Australia, Spain, America, New Zealand and France are among the most popular destinations.

Halifax Bank of Scotland saw another 14 per cent wiped off its value on the London Stock Exchange on another day of panic as markets worldwide continued to plunge. It comes on top of a fall of almost 18 per cent yesterday in the wake of U.S. investment bank Lehman Brothers going bust and Merrill Lynch announcing a cut-price takeover. Some £4 billion has been wiped off the company's value since Monday morning despite its insistence it is still a 'strong bank'.

News that U.S. investment bank Lehman Brothers (LEH.N: Quote, Profile, Research) had filed for bankruptcy protection sent stocks reeling worldwide, with banks bearing the brunt as investors braced for more pain across the sector.

"LEHMAN BROTHERS HAS PROVEN THAT THE BAR FOR THOSE 'TOO BIG TO FAIL' HAS JUST BEEN RAISED," said Paul Niven, head of asset allocation at UK fund manager F&C. "The short term will be tough for equities and credits and there is a good chance of further downside in prices in coming days."

Barclays, the UK bank that pulled out of emergency talks to save Lehman over the weekend, is in talks to buy the investment bank's core U.S. broker-dealer business, people familiar with the matter told Reuters on Tuesday.

But concerns intensified that AIG, once the world's largest insurer by market value, could be the next victim after a ratings downgrade, causing a rout in stock markets already battered on Monday after Lehman sought bankruptcy protection. Shares in AIG plunged nearly 61 percent on Monday and the U.S. Federal Reserve hired investment bank Morgan Stanley to review options for the firm, a person familiar with the situation said on Monday. AIG HAS LOST 92 PERCENT OF ITS VALUE THIS YEAR. But markets focused on AIG's ratings downgrade, which could force it to post more collateral and nullify insurance contracts, possibly setting in motion a chain reaction that could threaten its survival.

"You don't just have a potential impact on the reinsurer side, you have it on the institutions that might be holding AIG paper," said Lorraine Tan, director of research for Asia at debt rating agency Standard and Poor's in Singapore. "THIS WOULD HAVE A MUCH BIGGER IMPACT THAN A BANK GOING DOWN like Lehman or Bear (Stearns) or even a Wachovia or WaMu in the U.S. AIG has a much bigger presence globally. Their reach to a global customer base is quite sizable," she said.

S&P reduced its rating on Seattle-based WaMu to BB- from BBB-, leaving it three levels below investment grade, the ratings firm said today in a statement.

"Increasing market turmoil and the related impact from managing its concentrated mortgage franchise in this troubled housing and credit cycle led to the downgrade," S&P wrote. S&P cut its rating on the subsidiary bank to BBB- from BBB. S&P followed similar announcements last week from Moody's Investors Service and Fitch Ratings. WaMu, which has reported $6.3 billion of losses in the last three quarters because of soured mortgages, said on September 11 that it expects a third-quarter loan loss provision of $4.5 billion.

With AIG now tottering, a crisis that began with falling home prices and went on to engulf Wall Street has reached one of the world's largest insurance companies, THREATENING TO INTENSIFY THE FINANCIAL STORM and greatly complicate the government's efforts to contain it.

The company, whose stock fell 61% yesterday, is such a big player in insuring risk for institutions around the world THAT ITS FAILURE COULD SHAKE THE WHOLE FINANCIAL SYSTEM.

The study found that 56% of women would consider it if they hadn't found someone by a certain age - with 28 to 31 year-olds being the most likely. The survey shows that many single men and women are worried about meeting a true love as well as fertility issues. Twenty-six percent of men worried they wouldn't be able to conceive naturally.

Psychologist Linda Papadopoulos said: "INTERESTINGLY, SOCIAL NORMS OF PARENTING AND OF THE CONVENTIONAL FAMILY STRUCTURE ARE BEING CHALLENGED - no longer do we see the mum, dad and 2.4 children as the only ideal. Reconstituted families, same sex families and single parents are much more prevalent these days. And rather than ascribing to the 'norm' it seems that WOMEN AND MEN ARE MORE FLEXIBLE WITH THEIR DEFINITION OF 'FAMILY'."

European stocks fell again; the UK's FTSE 100 was down 2.44%, France's Cac down 1% and Germany's Dax down 1.58%. Shares in Japan, South Korea and Hong Kong fell more than 5%, having been shut on Monday for public holidays. Lehman, which may be about to sell its core assets to Barclays, is the latest victim of the global credit crunch.

The FTSE 100 of leading UK shares fell 127 points to 5,077 shortly before midday. The Dax index of leading German shares was down 96 points at 5968 points and France's Cac 40 was down 45 points at 4,124 points. Japan's benchmark Nikkei 225 index dropped 5% to a three-year low, shares in South Korea and Hong Kong shed almost 6% in value and Shanghai's index fell by about 3%.

THE COLLAPSE OF LEHMAN, which had incurred billions of dollars of losses from the failing US mortgage market, HAS RAISED FEARS THAT OTHER FINANCIAL INSTITUTIONS COULD BE HIT. "We're in the middle of a crisis," said YK Chan at Phillip Asset Management in Hong Kong. Meanwhile, there were fears that AIG, one of the world's largest insurers, could also face collapse.

AIG scrambled for a financial lifeline on Monday after investment bank Lehman Brothers Holdings Inc failed to find a rescuer and Merrill Lynch & Co Inc agreed to be taken over by Bank of America Corp. The US Federal Reserve has hired investment bank Morgan Stanley to review options for AIG - which has lost some 92 percent of its value so far this year - a person familiar with the situation said Monday.

AIG's precipitous stock decline has led ratings agencies to threaten downgrades that could force it to post more collateral and nullify insurance contracts, possibly setting in motion a chain reaction that could threaten its survival. In an ominous sign, two ratings agencies went ahead with downgrades after the market closed on Monday.

"AIG SEEMS TO BE THE NEXT GUY ON THE CHOPPING BLOCK," said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey. Bank of America - which would surpass Citigroup Inc as the country's largest bank by assets with the planned takeover of Merrill - saw its shares plunge.

"THE CONCERN FOR BANK OF AMERICA IS THE DEBT THAT THEY ARE ACQUIRING," said Marc Pado, US market strategist at Cantor Fitzgerald & Co in San Francisco."Secondly, is it too big of a purchase? They are dealing with Countrywide right now. Did they need to be dealing with this as well? There's some concern they might have bit more than they could chew."

"It's a return to pure capitalism, the survival of the fittest. The government can't and won't bail everybody out," said Justin Urquhart Stewart, investment director at 7 Investment Management in London. "INVESTORS WILL NOW RETREAT TO THE TRUSTWORTHY BANKS, THOUGH THAT'S NOT A PHRASE THAT TRIPS OFF THE TONGUE EASILY NOWADAYS."

The figures reflected earlier falls in Europe and the US, which on Monday had its worst day's trading since 9/11. The fourth-largest US investment bank, Lehman filed for bankruptcy protection on Monday, becoming the latest victim of the global credit crunch.

Japan's benchmark Nikkei-225 index dropped 5.3% in morning trading, Shanghai's index fell around 4%, and shares in South Korea and Hong Kong shares shed about 6% in value. Markets in Taipei and Singapore were also sharply down, and the pattern was repeated in Australia and New Zealand, although the falls were smaller.

The collapse of Lehman, which had incurred billions of dollars of losses from the failing US mortgage market, THREATENED TO DEAL A FURTHER BLOW TO OTHER FINANCIAL INSTITUTIONS, as they unwind deals with the former investment giant. Earlier in the day President George W Bush said: "In the long term I am confident that our financial markets are flexible and resilient and can deal with these adjustments."

Until now the U.S. has done all in its power to organise bail-outs for problem banks. This led to the widespread assumption that the big investment houses were regarded by the authorities as 'too big to fail'.

As a Wall Street investment broker it stands at the centre of global markets and will have TENS OF BILLIONS OF OPEN POSITIONS – UNCOMPLETED DEALS – WITH OTHER BANKS AND FINANCIAL ORGANISATIONS AROUND THE WORLD. So when the markets re-open there is likely to be a massive scramble to close those deals at the minimum of loss. But the likelihood is that investment groups around the world could find themselves facing LOSSES IN TELEPHONE NUMBERS.

The decline of Lehman Brothers from the fourth largest bank on Wall Street worth tens of billions of dollars was dramatic. AT THE END IT WAS WORTH LESS THAN £2BILLION, less than Northern Rock at the time of our Government's rescue a year ago. The best hope is that key assets can be sold off in a fire sale, enabling the company to pay back some of the creditors.

But the likelihood is of HUGE SHORTFALLS AND A CRISIS THAT WILL CASCADE THROUGH THE FINANCIAL SYSTEM, affecting insurance policies and pensions across the globe. The authorities have decided to teach Lehman executives and investors a lesson. There will be no more rescues for badly-run financial institutions. But in so doing they risk turning a severe downturn in the global financial system into a deep recession – from which it may take years to recover.

The implosion of Lehman, wracked by worries about losses in its portfolio of tens of billions of dollars of mortgages and real estate, comes six months after rival Bear Stearns collapsed and a week after the government took over mortgage companies Fannie Mae and Freddie Mac.

Lehman's travails have already heightened concerns about American International Group Inc, Merrill Lynch & Co and Washington Mutual Inc, whose shares all lost more than one-third of their value last week. Merrill is in merger talks with Bank of America, the Wall Street Journal said on Sunday, citing people familiar with the matter.

Nouriel Roubini, a New York University economics professor who predicted the U.S. housing crisis, said the government lacks the wherewithal to step in every time a big financial firm fails. "I DON'T SEE ANY SIMPLE SOLUTION TO THIS MESS," HE SAID.

Vegans and vegetarians are the most likely to be deficient because THE BEST SOURCES OF THE VITAMIN ARE MEAT, PARTICULARLY LIVER, MILK AND FISH. Vitamin B12 deficiency can also cause anaemia and inflammation of the nervous system.

The link was discovered by Oxford University scientists who used memory tests, physical checks and brain scans to examine 107 people between the ages of 61 and 87. When the volunteers were retested five years later the medics found those with the lowest levels of vitamin B12 were also the most likely to have brain shrinkage. It confirms earlier research showing a link between brain atrophy and low levels of B12.

- U.S. bank Lehman Brothers files for bankruptcy
- Merrill Lynch in $50bn takeover deal
- FTSE 100 Index falls more than five per cent
- Bank of England injects £5bn into money markets
- Lehman forced to sack all 5,000 British workers

The Bank of England pumped an extra £5bn into money markets today after two of the biggest investment banks in the world fell victim to the credit crunch. The collapse of Wall Street giant Lehman Brothers and $50bn takeover of its even larger neighbour Merrill Lynch sent shares tumbling, forcing the Bank to intervene.

Its funds were immediately five times oversubscribed with banks bidding £24.1bn, in a sign of the fresh pressure on the financial system. The European Central Bank also made 30bn euros (£23.8bn) available to banks to stem growing panic as the London Stock Exchange fell more than 280 points.

Lehman, which employs 5,000 workers in Britain, filed for bankruptcy at just before 6am. Its bankers were later told at an emergency meeting everyone was out of a job. Its even more illustrious neighbour, Merrill Lynch, then announced it had agreed a takeover deal with the Bank of America to save it from becoming the next to fall.

Thousands more jobs in the financial sector could go following the effective demise of two more illustrious Wall Street institutions. U.S. experts were ominously calling the events its worst financial crisis since the 1929 crash which ushered in the Great Depression. The dramatic events sent shock waves through the world's markets, with the FTSE falling 5.3 per cent to 5132,4 by midday.

It came after last-ditch talks failed to save Lehman and the U.S. Treasury refused to step in. THE FIRM HAS POSTED LOSSES OF $613BN IN WHAT IS THOUGHT TO BE THE BIGGEST BANKRUPTCY IN HISTORY.