Banks, Morgan Stanley | featured news

Citigroup Inc said quarterly profit plunged on a $4.7 billion write-down of its stake in a brokerage operated by Morgan Stanley, but mortgage lending increased and capital markets results rebounded.

So just when we thought we had heard all about the threats the hazardous use of derivatives could unleash on to the economy, a leading bank [Morgan Stanley] apparently managed to find a new way to use them, this time to help gouge consumers of more than $150 million.

Twelve global banks that have been publicly linked to the Libor rate-rigging scandal face as much as $22bn in combined regulatory penalties and damages to investors and counterparties, according to Morgan Stanley estimates.

The bond markets are treating Morgan Stanley like a junk-rated company, and the investment bank's higher borrowing costs could already be putting it at a disadvantage even before an expected ratings downgrade this month.

Morgan Stanley will slash 580 jobs in New York as part of a broader wave of layoffs underway at the bank, according to a public filing.

The ratings firm Fitch downgraded a cluster of the world's largest banks Thursday, pointing to trading challenges facing international markets. The banks included Bank of America, Morgan Stanley and Goldman Sachs, as well as Europe's Barclays, Societe Generale and BNP Paribas. Germany's Deutsche Bank and Switerzland's Credit Suisse were also downgraded.

Morgan Stanley said a group of investors believes the bank may have sold defective mortgage bonds contained in more than $6 billion of trusts, signaling that it may face litigation over its involvement.

Morgan Stanley’s chairman John Mack will step down as chairman and leave the board of directors at the end of 2011. The widely expected move brings an end to a storied Wall Street career for Mack. The North Carolina native was CEO of Morgan Stanley from 2005 to 2009. Current CEO James Gorman will take over the chairman’s role.

Morgan Stanley's first-quarter profit dropped nearly 50 percent, hurt by a steep decline in bond trading revenue.

Chief executives of some banks that received federal money, including Bank of America Corp, Morgan Stanley and Regions Financial Corp, used company jets for their personal use, the Wall Street Journal reported on its website.