Fed OKs Goldman, Morgan as bank holding companies

Sunday September 21, 9:53 pm ET

WASHINGTON (Reuters) – The Federal Reserve approved applications on Sunday from Goldman Sachs (GS) and Morgan Stanley (MS) to become bank holding companies, putting them directly under the regulatory supervision of the U.S. central bank, the latest step to restore calm to chaotic financial markets.

To provide increased liquidity to the companies, the Fed agreed to lend to the firms’ broker-dealer subsidiaries on the same terms as the Fed discount window for banks and the central bank’s Primary Dealer Credit Facility lending window for investment banks.

It said it was making the same collateral deals available to the broker-dealer subsidiary of Merrill Lynch (MER).

This entry was posted on Sunday, September 21st, 2008 at 9:53 pm and is filed under bailout, bank failure, bankruptcy, banks, bear market, bridge loans, bubbles, buy and hold, capital, cash out, debt-ceiling, deficits, derivatives, drawdown, economy, equity, fair value accounting, federal budget, Federal Reserve, financials, fiscal policy, lending standards, leverage, MBS, regulation, risk management, subprime, unfunded liabilities, writedowns. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

North Coast Investment Research