More Eastern buying of Western Banks – this time it’s the Chinese
Posted by markharrison on December 20, 2007
Ten days ago, I wrote about how the Singapore and Abu Dhabi governments are buying up Western banks.
This week has seen the Chinese Government buy almost 10% of Morgan Stanley, the US mega-bank, as reported in the International Herald Tribune.
To give you an idea of how big Morgan Stanley is, it’s just written down the value of its SubPrime holdings by $9.4 billion. This is about 50 times the loss as Bradford and Bingley made in their write-down.
$9.4 billion is, to put it mildly, an awful lot of money to have admitted you loaned to people who couldn’t really afford to pay it back. In these circumstances, is it surprising that it’s getting tougher to borrow?
Oh, and has the head of Morgan Stanley resigned over this? No, but he has said that he won’t accept a bonus this year.