Morgan Stanley to raise $2.2bn

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Morgan Stanley is to raise a further $2.2bn (£1.3bn) by selling shares in the bank, as it aims to start repaying US government aid.

The bank said it would sell 45 million shares to China Investment Corporation, and 16 million to Japan's Mitsubishi UFJ Financial Group.

Morgan Stanley is seeking approval from the Federal Reserve to repay the $10bn in emergency loans it was given.

It and 18 other US banks have been granted loans of $229bn in total.

The Federal Reserve is due to announce next week which of the 19 will be able to start repaying their loans, and from when.

The 19 banks were also recently subjected to a "stress test" to see which required additional finance on top of the government's Troubled Asset Recovery Fund (Tarp) loans to strengthen their capital base.

Morgan Stanley was one of the 10 that failed the Tarp test, with Fed and Treasury officials estimating that it needed to raise $1.8bn.

The bank was able to do this quickly, selling $4.6bn in stock and $4bn in debt last month.