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Morgan Stanley and Citibank Back on Solid Ground After Near Meltdown

February 10, 2011

More information from the FCIC, Financial Crisis Inquiry Commission, report are emerging:

NY Times reports: Big banks like Citigroup and Morgan Stanley, which were battered by the 2008 financial crisis, are once again on solid ground.

But a slew of documents, e-mail messages and minutes of crucial regulatory meetings released recently by the Financial Crisis Inquiry Commission provide fresh detail about just how close to the brink both firms came.

This week the commission will release another set of documents on its Web site, including an interactive timeline that goes back to the Great Depression. The site will also feature hours of previously unreleased audio recordings of interviews with major players in the crisis, like Joseph Cassano of the American International Group, who was at the center of the credit-default swaps business.

Morgan Stanley, too, was on shaky ground, before negotiating a cash infusion in October 2008 from Mitsubishi UFJ Financial Group of Japan. “Morgan is the ‘deer in the headlights’ and having significant stress in Europe,” wrote Amy White of the Federal Reserve Bank of New York in an e-mail on Sept. 19, 2008, to several senior officials of the New York Fed, including its then-chairman, Timothy F. Geithner, currently the Treasury secretary.

“It’s looking like Lehman did a few weeks ago,” Ms. White wrote, on a day when Morgan Stanley experienced $22 billion in outflows from its prime brokerage unit.

Entire article, click here

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