CIT-United States's fifth largest bankruptcy

United States largest and medium-sized commercial lending institutions CIT Group yesterday in New York bankruptcy protection, this century-old shop to the 710 billion assets become the fifth largest in the history of the United States bankruptcy cases.

In the first four before CIT bankruptcy cases are the Lehman Brothers, Washington Mutual Bank, WorldCom, and General Motors.

Bankruptcy application file shows that the CIT Group's total assets of approximately $ 710 million, debt totals $ 649.

CIT expressed in filing for bankruptcy protection after two months away from bankruptcy protection.

CIT also said that out of bankruptcy protection after all of the issued ordinary shares and preference shares will be cancelled. Therefore, including capital injection to the CIT 23 billion United States Government, shareholders are likely to lose their shareholders.

Government 23.3 drakes

Analysts therefore notes that the Government of the United States bankruptcy of CIT is also a great blow for United States Government last December by bad asset relief program (TARP) to CIT investment 23.3 million. Only in the CIT Bank and pay off the debt owed by the holder, the taxpayer could have got back to the original investment of money. These losses are the TARP assistance of a pen.

CIT would like to be able to emerge from bankruptcy protection, and the ability to factoring and vendor financing transfer to the Bank of Utah. Federal regulators have yet to agree that CIT business transfer; in addition, regulatory bodies also need to uncomment the CIT absorption deposit limits. However, according to informed sources said that the company has been the clear positive signal of these obstacles, but as yet no agreement.

At CIT bankruptcy before the United States Federal Deposit Insurance Corporation on October 30, shut down the National Bank of California and is located in Illinois, Texas and Arizona, and 8 private bank, thus making this year the size of the United States bankruptcy banks in total increased to 115.

Or let the credit to tight

CIT bankruptcy or make further tight credit, and suppress the United States economy.

Becker capital management company stock research supervisor BlakeHowells said: "CIT bankruptcy makes small business also lost a capital source, and not many companies are willing to provide small business loans. ”

CIT Group bankruptcy news once increase u.s. depth adjustment of risk aversion sentiment. Asia time yesterday, the most high against the US dollar Yen to the dollar 89.17 yen, higher than the previous Friday Weipan 90.00 nearby. The yen weakened against the euro and the Australian dollar is also going kin.

But the outside world in the last few months has been widely anticipated CIT will file for bankruptcy protection, it is expected that this message is unlikely in the near future, on financial system constitutes a great impact.