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E*Trade Tries to Reboot

Its customers are no longer panicking, but the online bank and brokerage still faces a shaky stock market and potential loan losses

E*Trade Financial (ETFC) appears to have dodged the bullet of bankruptcy—for now.

Three months ago, the online bank and brokerage was facing a classic run on the bank scenario as customers, panicked by E*Trade's exposure to toxic subprime debt, pulled billions out of their accounts. But new evidence suggests the danger has passed: According to data released Feb. 13, E*Trade was able to increase its net new retail accounts by 16,000 in January. Clients' cash balances also increased, though their total holdings fell along with the stock market. Acting Chief Executive Jarrett Lilien says E*Trade has turned a corner.