Citigroup and Merrill Lynch, two companies that just named new chief executives amid financial slides due to troubles in the U.S. housing market, recently raised billions of dollars from outside investors. Now, according to various news reports, they are in discussions to get additional infusions of capital from investors, primarily foreign governments.
Citigroup and Merrill Lynch, twocompanies that just named new chief executives amid financial slides due totroubles in the U.S.housing market, recently raised billions of dollars from outside investors.Now, according to various news reports, they are in discussions to getadditional infusions of capital from investors, primarily foreign governments.
The Wall Street Journalreports Merrill is expected to get $3 billion to $4 billion, much of it from aMiddle Eastern government investment fund. Citi could get as much as $10billion, likely all from foreign governments.
Such large investments would bethe latest sign big banks are undergoing a rapid recapitalization to stabilizetheir shaky financial foundations. Already, foreign governments have investedabout $27 billion in Merrill, Citi, UBS AG, and Morgan Stanley.
According to the WSJ article, thenew investments are sure to draw attention in Washington and any questions will lengthenthe time regulators need to review the deals. And federal lawmakers, who’vegiven the string of government investments a pass, are more likely to take aharder look in this election year.
