An $85 billion dollar U.S. lifeline for American International Group gave some respite to battered financial stocks, while the UK's biggest mortgage lender HBOS Plc and Lloyds TSB contemplated a merger which would reshape British banking.Shares in Britain's HBOS Plc were initially sharply lower for a sixth consecutive day on Wednesday, but recovered after a source familiar with the matter confirmed a report that it was in merger talks with Lloyds TSB.
Around the time the AIG deal with U.S. authorities was announced, British bank Barclays Plc gave markets another boost: agreeing to buy parts of Lehman for $1.75 billion.
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