Citi, Merrill Look Overseas for More Cash

Big Banks could announce $25 billion in additional losses next week
By Jim O'Neill,  Newser User
Posted Jan 10, 2008 7:23 AM CST
People walk past the Merrill Lynch building on Thursday, Nov. 15, 2007 in New York. John Thain, CEO of NYSE Euronext, was chosen on Wednesday to lead Merrill Lynch effective Dec. 1. (AP Photo/Brian McDermott)   (Associated Press)
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(Newser) – Merrill Lynch and Citigroup, which have already tapped foreign investors for billions of dollars to help bail them out of the subprime debacle, are headed back to the well, reports the Wall Street Journal. Merrill is seeking some $4 billion more, Citi up to $10 billion—all expected to come from foreign governments—to help recapitalize coffers stripped by writeoffs the past two quarters.

Foreign governments  have poured more than $27 billion into big banks, including Merrill and Citi, since the crisis began. Further influxes could prompt Washington to more closely monitor the deals; they also risk raising the ire of shareholders seeing their stakes diluted by the new shares. Citi and Merrill are expected to announce up to $25 billion in additional losses next week.