The collapse of banking giant Lehman Brothers has hit jobs in the City.
Without a buyer, the US bank has been forced into bankruptcy and fellow US firm Merrill Lynch is selling to Bank of America.
The Financial Services Authority (FSA) has told UK banks to declare any exposure to Lehman.
It has announced it is working to limit any disruption from the bank’s collapse.
“The FSA is working with market practitioners, including the London Clearing House, to ensure the process connected with the winding down of this wholesale business is completed in an orderly manner to minimise any market disruption,” it said.
The Times has reported 5,000 UK based Lehman staff were leaving offices in London and “clearing their desks yesterday in the country’s biggest single loss of jobs since the collapse of Rover in 2005”.
The bank employs 26,00 workers globally – most of these are expected to lose their posts.