The giant US lender CIT group has filed for bankruptcy. The move comes after a debt exchange offer to bondholders failed.
A loan provider to thousands of small and medium sized businesses CIT has struggled to fund itself because of the global credit crisis and the recession exposing its loans. The bankruptcy, one of the largest in US corporate history, has been widely expected for months and is thought unlikely to cause a massive shock to the financial system. The group has put forward a re-organisation plan but the US government is expected to lose around 1.5 billion euros it invested in CIT last December.