US to outline $250 bn bank bailout

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Bank of Japan mulls exit planCiti to cut back US branches to 6 cities: ReportBofA cuts customer overdraft feesUS rebuffing big banks' push to exit bailout

Bangkok, October 14: : meeting said.

The government would take $25 billion in preferred stock in Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley and Bank of New York, the sources said.

All except Bank of America would have to raise $10 billion in matching capital to qualify, a source said.

This was an about-face from a previous US focus on buying bad debt from banks, after world finance ministers coalesced around a British proposal at weekend meetings in Washington.

Britain's bank plan called for 37 billion pounds ($64 billion) of taxpayers' cash to bail out three major banks in a move that could make the government their main shareholder.

Also on Monday, investment bank Morgan Stanley reached a financing deal with Japan's Mitsubishi UFJ Financial Group Inc (MUFG), possibly with US government support.

Morgan shares soared 87 per cent, after losing 58 per cent last week [ID:nLD319859] and in Tokyo MUFG shares rose 14 per cent, hitting their daily limit-high at 810 yen.

Spain's Banco Santander said it would acquire the remaining 75 per cent stake in Sovereign Bancorp Inc it does not already own, as the euro zone's biggest bank hunted for bargains in the beaten-down financial sector.

In addition to the bank bailouts, the US Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank said they would lend commercial banks as much US dollar liquidity as they needed.

That had an instant impact on bank-to-bank lending rates, which eased.

The euro gained on the European plans while the yen fell about 0.8 per cent from New York to 102.80 per dollar.

The yen is popular in so-called carry trades, when investors sell the low-yielding currency to invest in higher-yielding currencies. When investors get nervous about risk, as in recent months, they unwind such trades.

"The yen had been bought due to risk aversion, but such moves are likely to subside for now," said Hiroshi Yoshida, a currency trader at Shinkin Central Bank.

British Prime Minister Gordon Brown called on world leaders to create a new financial architecture to replace the system set up at a conference in Bretton Woods, New Hampshire, in 1944.

"Sometimes it does take a crisis for people to agree that what is obvious and should have been done years ago can no longer be postponed," Brown said in a speech at the London offices of Thomson Reuters.