The Wall Street Journal-20080214-Credit Crunch- In Brief

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Credit Crunch: In Brief

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Morgan Stanley to Cut

About 1,000 Employees

Morgan Stanley is reining in its U.S. residential-mortgage operations and closing its United Kingdom-based residential-mortgage lending business, Advantage Home Loans, in response to continued deterioration of the mortgage markets. About 1,000 employees in the U.S. and U.K. will be affected by the changes. The New York investment bank will continue to service U.S. mortgage loans through its Saxon Mortgage Services business and still offer residential mortgages to its retail brokerage clients. The job cuts are on top of the 1,000 layoffs set in motion several weeks ago.

R&G Settles With SEC

In Inflated-Profit Case

The Securities and Exchange Commission filed a settled action against R&G Financial Corp., alleging the Puerto Rican bank-holding company improperly inflated its net income by about $180 million from 2002 to 2004. R&G neither admitted nor denied wrongdoing in the complaint settlement, which the SEC said levied no monetary sanction against R&G. The SEC said R&G's board made significant management changes, restated its results and "took other significant remedial action," including entering consent orders with the Federal Reserve's Board of Governors and the Federal Deposit Insurance Corp.

Japan Banks See Losses

Tied to Subprime Lending

Japanese bank losses tied to U.S. subprime mortgage lending more than doubled to $5.6 billion over the final quarter of last year, according to Japan's banking regulator. The numbers the Financial Services Agency compiled from a survey of the country's banks, though small compared with U.S. and European losses, are in line with trends already flagged. However, they highlight the speed at which shockwaves from the subprime crisis spread and could fuel concern the final price tag may be much higher.

Bradford & Bingley Took

$184 Million Write-Down

United Kingdom mortgage lender Bradford & Bingley PLC took a GBP 94 million ($184 million) write-down on its exposure to risky assets and saw other big losses derail profit and send its shares to a record low. B&B shares tumbled 23%, or 56.25 pence, to 187 pence yesterday after Britain's biggest buy-to-let mortgage provider said GBP 226 million of charges would cut its 2007 profit to GBP 93.2 million, down 48% from GBP 177.7 million in the previous year.