NEW YORK (Reuters) CIT Group Inc, a lender to hundreds of thousands of small and medium-sized businesses, filed for bankruptcy on Sunday, as the global financial crisis left it unable to fund itself and the recession clobbered its loans.
The bankruptcy, one of the largest in U.S. corporate history, has been widely expected for months and is unlikely to provide a massive near-term shock to the financial system. But CIT's trouble could further weigh on the fragile U.S. economy.
The bankruptcy is also a blow for the U.S. government, which invested $2.33 billion in CIT in December through the Troubled Asset Relief Program and will likely lose most of it.
