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HSBC rumoured to be looking at fundraising

Despite being seen by many analysts as one of the rocks of both the UK and worldwide financial sector, Morgan Stanley has today voiced the opinion that HSBC is looking to raise finance in the short term. In their worst case scenario they believe that HSBC needs to raise an additional £20 billion in the short to medium term to increase the company's capital adequacy and asset levels in light of an expected substantial write-down in 2009.

While in many ways this rumoured move by HSBC has been repeated by competitors across the board, many had believed the company was much safer and stronger than many competitors. However it looks as though the general worldwide recession, as opposed to just the UK-based recession, has impacted upon business and will see a substantial increase in write-offs in the short to medium term. With this in mind the group could well decide to ask shareholders for additional funding although whether they can participate in the UK taxpayer funded bailout scheme remains to be seen.

The suggestion that the mighty HSBC may well be struggling has prompted many analysts to revisit their forecasts and suggestions for other UK banks at a time when substantial write-downs appear to be only a few weeks away.

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