The sub-prime crisis claimed the scalp of Wall Street's highest-ranking woman late last night as Morgan Stanley announced the surprise departure of its co-president Zoe Cruz, three weeks after suffering $3.7bn writedowns, reports The Times.
Ms Cruz's is the third high-profile casualty of the sub-prime crisis to go in a month. Stan O'Neal was ousted as chief executive at Merrill Lynch at the end of October and Chuck Prince was forced out as the head of Citigroup five days later.
Ms Cruz, 52, led Morgan Stanley's investment bank, the division that bore the brunt of the writedowns, but was still tipped as a successor to John Mack, the chief executive, as recently as early this month.
MERVYN KING, THE GOVERNOR OF the Bank of England, yesterday issued his starkest warning yet of the dangers facing the British economy, amid fears of a worsening of the global credit crisis and threats to both domestic inflation and growth, The Independent reports.
Mr King warned MPs on the House of Commons Treasury Select Committee of “rather uncomfortable” times ahead, with a “big risk” that the credit squeeze could intensify.
He said the “sheer uncertainty” and fear of what lies ahead among US banks in particular was driving wholesale interest rates back up to levels seen at the height of the summer credit crises.
Mr King added: “In recent months, the near-term outlook for both inflation and growth has become less benign.”
He also had a particular word of caution for those in the property market: “For the UK, the consequences of [turmoil in financial markets] are difficult to assess and are likely to be evident first in the housing and commercial property markets.”
THE HIGH STREET ENJOYED a much needed boost in the run up to Christmas, with sales growth unexpectedly rising in November and shop prices increasing at the sharpest rate in nearly a decade, a CBI survey showed today.
In its latest monthly snapshot of the retail sector, the business organisation said the balance of retailers reporting a rise in sales rather than a fall edged up to 13 this month from 10 in October. Analysts had predicted an easing to eight.
The surprising results come amid gloomy trading reports from retailers such as JJB Sports; B&Q group Kingfisher; DSG, which owns Dixons and Currys; and the jewellery group Signet.
However, the survey showed that retailers expected the year ahead to be tough, with the expected sales balance falling to 11 from 15, the lowest since January.
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