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Business News

Could Morgan Stanley be next?

Investors were waiting for news of yet more potential rescue deals in the US banking sector today as reports suggested that Morgan Stanley would be the next to succumb to the credit crunch.

The firm - one of only two independent investment banks left standing in the US - was said to be in early stage talks over a possible merger with troubled regional lender Wachovia.

Meanwhile, rumours were also swirling around Goldman Sachs and Seattle-based lender Washington Mutual as banks are seen to be scrambling to secure their future amid the financial market crisis.

Central banks helped calm plunging stock markets today after launching a co-ordinated global effort to pump 180 billion US dollars (£98.7 billion) into the financial system.

America's Dow Jones Industrial Average opened nearly 2% higher in response to share rebounds in London and across Europe.

But attention was still focused on the banking sector, with fears that there may be more financial companies still to fail in the wake of the collapse of US bank Lehman Brothers.

The past week has seen the demise of Lehman, Merrill Lynch's rescue by Bank of America, the US Government bail-out of insurance giant AIG and, in Britain, the £12.2 billion takeover of HBOS by Lloyds TSB - the biggest rescue deal in UK banking history.