Fourth largest US bank resorts to emergency fundraising

Fourth largest US bank resorts to emergency fundraising

www.guardian.co.uk

America's fourth largest bank, Wachovia, is raising $7bn (£3.52bn) through emergency fundraising as the subprime mortgage crisis in the US continues to reverberate through the banking sector.

Wachovia is raising the funds through public offerings of common and convertible preference stock after incurring a surprise $350m loss in the first quarter of 2008 compared with $2.3bn in profit a year earlier.

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It seems more trouble for capitalism in the valley of Wall Street. Lets hope consumers do not run the bank and cause the Federal Reserve to rescue another finanical institute.

This is the major problem here.

People panicking results in dangerous outcomes and conclusions. A run on Northern Rock (British bank) resulted in £1.5 billion withdrawn and nationalisation of the mortgage bank.

www.guardian.co.uk
(visit the link for the full news article)