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Journal of a plague year: Faith cracks
(China Daily)
Updated: 2009-01-01 08:50 Institutions that seemed as solid as their Manhattan headquarters buildings crumbled. Lehman Brothers Holdings Inc, with assets of $639 billion, filed the largest bankruptcy in US history on Sept 15. Its creditors may have lost as much $75 billion, the firm's chief restructuring officer said. Bear Stearns Cos was taken over by JPMorgan Chase & Co in March after a funding crisis triggered by losses from subprime mortgage investments. Merrill Lynch & Co, facing a crisis of its own, sold itself to Charlotte, North Carolina-based Bank of America Corp. And the last two major investment banks, Goldman Sachs Group Inc and Morgan Stanley, converted to bank holding companies and got capital injections from the US government. Bank failure In the largest US bank failure, Washington Mutual Inc collapsed in September with $307 billion in assets. There were 25 bank failures in 2008, the most in 15 years, according to the Federal Deposit Insurance Corp. The combined assets of lenders that failed in 2008 exceeds the total of those that collapsed in the preceding six years. Citigroup Inc, whose shares lost 78 percent of their value in 2008, needed $20 billion in US bailout funds in November on top of an earlier $25 billion infusion of capital. The government also guaranteed $306 billion of the bank's troubled assets. The wave of writedowns and losses that swamped financial institutions around the world reached $720 billion in 2008. It also eroded employment: 221,360 job cuts in the financial services industry were announced. Wall Street bonuses became so rich in recent years that $1 million was referred to as "a buck." In 2008, chief executive officers including Lloyd Blankfein of Goldman Sachs and John Mack of Morgan Stanley have said they will get no bonuses at all. Agencies
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