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LONDON SHARES EXPECTED TO STAY STABLE

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The Bank of England does not expect Friday's dramatic fall on Wall Street to be repeated on the London equity market when trading resumes on Monday, The Financial Times reported Saturday.

"It is understood that the bank considers that London shares are not underpinned by leveraged situations to the same degree as U.S. share prices," the paper said in its front-page report on the Wall Street drama.The newspaper said that the Bank of England also felt many lessons had been learned about policy and supervisory issues during the global 1987 crash when central banks in major industrial nations showed they were able to cooperate closely in a crisis and would be able to do so again.

Patrick Foley, deputy chief economic advisor at Lloyds Bank, told the Financial Times it was unlikely London would see a continuation of Wall Street's fall, and Alan Budd, economic advisor to Barclays Bank, said that although it was difficult to predict whether Wall Street would correct itself, his guess was that Friday's fall "did not herald the end of the world."

The Financial Times said in its specialist "Lex Column" that in 1987 the market was unsure of what it was afraid of.

"This time, it is afraid of junk. Hence the flight to quality - into treasury bonds and out of dollars into the deutschemark mark and the yen," it said.

"It is hard to credit that yesterday's violent reaction can simply be due to a single leveraged deal coming unstuck, even one as big as United Airlines," the paper said. "But whatever lies behind it, in fundamental terms the behavior of the dollar alone ensures that this is not merely a domestic U.S. problem.

"It will be a tense weekend for the world's investors, and for a market like the United Kingdom, the only consolation lies in the fact that it had its own grounds for nervousness already," the paper said.