Federal Reserve Allows Morgan Stanley, Goldman Sachs To Become Bank Holding Companies - Hoping Someone Shows Them The Money

"Last major investment banks change status" from AP reports that  Morgan Stanley and Goldman Sachs have received permission from the Federal Reserve to change their status to bank holding companies - which potentially has saved them from being swept up by commercial banking entities. 

This will allow the two entities to create commercial banks to take deposits. 

The request for the change to bank holding companies was granted by a unanimous vote of the Fed's board of governors during a late Sunday meeting in Washington.

The change of status means both companies will come under the direct regulation of the Federal Reserve, which regulates the nation's bank holding companies. The banking subsidiaries of the two institutions will face the stricter regulations that commercial banks are required to meet. Previously, the primary regulator for Goldman and Morgan Stanley was the Securities and Exchange Commission.

"Goldman, Morgan Stanley to become regulated banks" from the Financial Times

Comments

[Profsilver]

The average person has no idea what an investment bank does, but will have to foot the bill for what the IBs have been doing. Perhaps saving them (and AIG) would cost less than letting them fail but by doing so the government has set a dangerous precedent.