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SINGAPORE : Investment company Temasek Holdings is in talks to inject billions of US dollars into troubled Wall Street investment bank Merrill Lynch, the Wall Street Journal reported on its website on Friday.
Citing a person familiar with the situation, the Journal said Temasek is in advanced talks to inject as much as five billion US dollars into the bank, which has suffered massive credit losses linked to a US housing downturn.
Temasek has declined to comment on the report.
In late October, Merrill Lynch forced the exit of its CEO and Chairman Stan O'Neal after the brokerage and investment bank wrote-off nearly eight billion US dollars in mainly sub-prime mortgage-backed securities.
Failure of sub-prime loans, granted to people with patchy credit histories during a housing boom, have sparked a surge of home foreclosures and played havoc with mortgage investments held by big banks.
On December 10, the Government of Singapore Investment Corporation (GIC) announced it would inject almost 10 billion US dollars into Swiss bank UBS, which has also revealed multi-billion US dollar writedowns related to the sub-prime crisis.
An October report by Citigroup Global Markets said sovereign wealth funds have recently emerged as among the most important players in global financial markets.
On Thursday, US investment bank Morgan Stanley, another victim of the troubled mortgage market, announced a Chinese state-controlled investment fund would gain a stake of almost 10 percent, worth five billion US dollars, in the bank. - AFP/ch
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