As Investment banks all over the world come to terms with the potency of their toxic assets, Morgan Stanley is weighing whether it should remain independent or merge with a retail bank whose assets fall in a more traditional framework.
CNBC reported on its website this morning that Morgan Stanley officials were not in merger talks as of late Tuesday, “But senior people at Morgan concede that further zig-zags in the company’s stock price could and possibly will force the company to change course and seek a merger partner, probably a well capitalized bank,”
Morgan Stanley shares closed down 10.8% yesterday at $28.70 down a full 46% so far this year.
The news will surely send further shockwaves through the system as management at an institution of Morgan Stanley’s reputation shows such lack of confidence in its own asset base.
However, according to Reuters on Tuesday, Morgan Stanley’s Chief Financial Officer Colm Kelleher said the second largest investment bank in the USA remains confident in its broker-dealer model and dismissed the need to merge with a deposit-taking bank, even as he maintained a cautious stance about the markets.