RPT-WRAPUP 1-U.S. bad debt plan spurs rally, raises questions

viernes 19 de septiembre de 2008 09:11 CEST

(Repeats to wider audience, with no changes to text)

* Paulson considers entity to deal with bad debt

* US govt, Congress to work this weekend on toxic debt plan

* Asian share markets rally

* Morgan Stanley, Wachovia in more formal talks - sources (For complete coverage, click [ID:nN13574113])

By Tony Munroe

HONG KONG, Sept 19 (Reuters) - A radical U.S. taxpayer-funded plan to restore confidence in battered financial markets by mopping up toxic mortgage-related debt triggered a rally in stocks, but raised questions over how long it would take and how it would work.

Morgan Stanley (MS.N: Cotización), keeping options open after the independent investment banking model came under attack this week, held merger talks with Wachovia Corp WB.N and other banks, and discussed a possible increase in the stake held by China's sovereign wealth fund, sources familiar with the plans said.

HSBC Holdings (HSBA.L: Cotización) (0005.HK: Cotización), meanwhile, walked away on Friday from a $6.3 billion deal for a controlling stake in Korea Exchange Bank 004940.KS after months of regulatory delays and the plunge in financial stocks, fuelling speculation the UK lender may be gearing up to buy an embattled rival in the West.   Continuación...