Archives for: April 2008, 21
Now to Recapitalize the Smaller Banks
April 21st, 2008Now that foreign governments (through their funds usually called sovereign wealth funds) have come to the financial rescue of the big banks and brokerage firms, like Citigroup, Merrill Lynch and Morgan Stanley, it has become necessary to also recapitalize the smaller US banks as the credit crisis widens. Today, a privet equity form is investing 7 billion in the 10th largest US bank, National City Corp..
Quote:
"Like many regional lenders, National City, which is based in Cleveland, Ohio, has been hard hit by mortgage losses. The bank lost $333m in the fourth quarter.
The National City deal comes weeks after TPG led a $7bn recapitalisation for Washington Mutual, the largest US savings and loan association, and only days after Wachovia announced plans to raise $7bn from shareholders.
Bankers and investors described the National City transaction as emblematic of the second wave of rescue finance deals that have followed the collapse of the US subprime mortgage market and the ensuing turmoil in global finance."
Here is a link to the entire article:
http://www.ft.com/cms/s/0/f0f7ba6e-0f28-11dd-9646-0000779fd2ac.html?nclick_check=1
Michael
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