Morgan Stanley Granted Bank Holding Company Status
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Financial Institutions Morgan Stanley and Goldman Sachs announced today that the federal government has granted them approval to be known as a ‘Bank holding Company’ pending a statutory 5-day anti-trust waiting period. How this will affect the already turmoil filled market remains to be seen. What this essentially means is that these two colossal companies will now function like a commercial bank, accepting deposits and dealing directly with companies. The Fed was busy Sunday night with other ‘clean up’ Style business also, authorizing the Federal Reserve Bank of New York to extend credit to the broker-dealer subsidiaries of Goldman and Morgan Stanley. Additionally, The Fed approved the extension of credit to the subsidiaries of Goldman, Morgan and Merrill Lynch against collateral which will be eligible to be pledged at the PDCF. The recent development’s do not come as a surprise to many after the event’s that unfolded in the past week, which saw the bankruptcy of the Lehman Brothers, bailout of AIG and the buyout of Merrill Lynch. 
Sources: http://www.federalreserve.gov/newsevents/press/bcreg/20080921a.htm |
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