NEW YORK, October 13, 2008 (AFP) – US banking giant Morgan Stanley on Sunday was trying to salvage a nine-billion-dollar deal to sell 21 percent of its capital to Japan’s Mitsubishi UFJ Financial Group, The New York Times said Sunday.
Negotiations between the two banks amid the current global market turmoil were seen as crucial by financial markets for the future of Morgan Stanley, and both the US Treasury Department and the Japanese government are involved in the talks, the daily said.
“The completion of a deal might help calm markets worldwide, which sank last week because of escalating concerns about the fate of financial institutions like Morgan Stanley,” said the Times which talked to people ivolved in the talks.
“Investors might read the investment as a sign of confidence in the bank’s future,” it added.
Along with Goldman Sachs, Morgan Stanley is one of Wall Street’s remaining major banks that have not been sold or filed for bankruptcy. Its financial situation, however, is precarious and, like Goldman Sachs, it recently gave up its investment business to qualify for US Federal Reserve financial backing as a commercial bank.
Mitsubishi UFJ Financial Group announced in late September it would buy nearly