A sign hangs at Morgan Stanley Inc. headquarters in New York City. [Xinhua]
The Federal Reserve said Sunday it has approved a request by two U.S. major investment banks Goldman Sachs and Morgan Stanley to become bank holding companies.
The U.S. 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 U.S. 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 News Agency Spetember 22, 2008)
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