Goldman Sachs, Morgan Stanley to become bank holding companies
22/9/2008 16:09
The Federal Reserve said yesterday it has approved a request by two US
major investment banks Goldman Sachs and Morgan Stanley to become bank holding
companies.
The US central bank said in a statement it is "to provide
increased liquidity support to these firms" for the last remaining two major
investments to change their status in order to manage "their funding within a
bank holding company structure."
The Federal Reserve Bank of New York will
extend credit to the US broker-dealer subsidiaries of Goldman Sachs and Morgan
Stanley against all types of collateral that may be pledged at the Federal
Reserve's primary credit facility for depository institutions or at the existing
Primary Dealer Credit Facility (PDCF).
The Federal Reserve has also made
these collateral arrangements available to the broker-dealer subsidiary of
Merrill Lynch, said the statement.
In addition, the central bank also
authorized the Federal Reserve Bank of New York to extend credit to the
London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley, and
Merrill Lynch against collateral that would be eligible to be pledged at the
PDCF.
Xinhua
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