MUFG agrees to buy 10-20 percent of Morgan Stanley

Morgan Stanley and Goldman Sachs survived the financial storm that destroyed their rivals as Wall Street get ready for a week of fast talking over a proposed $700 billion (£380 billion) bailout for troubled banks from the federal government.

Morgan Stanley agreed a deal with Mitsubishi UFJ Financial Group Japan’s largest bank, the merger sent Morgan Stanley share prices up 12 percent in pre-market trading when it was announced that MUFJ agreed to buy up to 20 percent stake in Morgan Stanley.

After frantic talks between President Bush administration and Congress over the weekend, the Federal agreement was proposed to turn the once high-flying investment banks into more conventional depositary institutions and to try and calm the markets that had been In financial hell last week and to prevent the economy going into a brutal recession.

Goldman Sachs and Morgan Stanley moved quickly and became bank holding companies to avoid following suit with their rivals that were either taken over or destroyed in the devastating drama of Wall Street.

Read the full article at reuters