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| Morgan Stanley in 20% stake sale | Morgan Stanley in 20% stake sale |
| (about 1 hour later) | |
| Japanese banking giant Mitsubishi UFJ Financial Group has said it will buy a stake in troubled Wall Street rival Morgan Stanley. | Japanese banking giant Mitsubishi UFJ Financial Group has said it will buy a stake in troubled Wall Street rival Morgan Stanley. |
| The firm said the stake will account for 10% to 20% of Morgan Stanley's common shares. | The firm said the stake will account for 10% to 20% of Morgan Stanley's common shares. |
| A price has not yet been decided. Further details will be revealed after the group has completed due diligence. | A price has not yet been decided. Further details will be revealed after the group has completed due diligence. |
| Morgan Stanley has been humbled by the credit crisis tearing through the world's financial system. | Morgan Stanley has been humbled by the credit crisis tearing through the world's financial system. |
| It was widely reported last week that Morgan Stanley was looking for a tie-up to reassure investors worried about its financial health. | It was widely reported last week that Morgan Stanley was looking for a tie-up to reassure investors worried about its financial health. |
| The Reuters news agency had reported that Morgan Stanley had been holding talks with US bank Wachovia and a Chinese sovereign wealth fund about a takeover or investment opportunity. | |
| Mitsubishi UFJ Financial said in a statement that the deal was dependent on due diligence and the approval of the necessary regulatory authorities. | |
| Continued uncertainty | |
| The scramble to find a partner came after a dramatic collapse in confidence in the world's financial institutions, which saw the sudden demise of US investment bank Lehman Brothers and forced Merrill Lynch to agree to a takeover by Bank of America. | |
| Last week's events also saw the biggest insurer in the US, American International Group (AIG), effectively nationalised by the US government after it failed to access enough cash to run its business. | |
| In the UK, a run on the shares of HBOS - the owner of Halifax and Bank of Scotland - drove it to shelter in the wings of Lloyds TSB amid fears for the future of the UK's top mortgage lender. | |
| Morgan Stanley and Goldman Sachs - the two last major investment banks on Wall Street - have been forced to change their status to take deposits from investors to raise funds. | Morgan Stanley and Goldman Sachs - the two last major investment banks on Wall Street - have been forced to change their status to take deposits from investors to raise funds. |
| The move to become bank holding companies means agreeing to much tighter regulation and supervision by the Federal Reserve, creating more certainty about the strength of their finances. | |
| It also means greater access to Federal Reserve funds. |