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Economic Crisis Claims 2 More US Banks


The economic crisis has forced two major U.S. banks to sell shares to more stable financial institutions.

Japan's Mitsubishi UFJ Financial Group announced Monday that it has purchased a 21 percent stake in U.S. investment bank Morgan Stanley for $9 billion.

The deal is a key part of the U.S. government's strategy to revive the financial system by drawing in outside investment.

On Sunday, the Federal Reserve approved the takeover of troubled Wachovia Corporation by Wells Fargo.

Wachovia is the latest bank to collapse or seek a takeover because of losses linked to the subprime housing market.

Last month, U.S. investment bank J.P. Morgan purchased the assets of Washington Mutual Bank after the institution was seized by government regulators in the largest bank failure in U.S. history.

Washington Mutual had billions of dollars of debt because it heavily invested in selling risky subprime mortgages to customers who later could not pay them back.

Subprime mortgages are home loans made to borrowers with poor credit histories.

The financial crisis began when tens of thousands of borrowers failed to pay back billions of dollars worth of these loans.

The crisis has rocked many major investment banks.

Some information for this report was provided by AFP and AP.



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