Bailout for Goldman Sachs and Morgan Stanley?
September 22, 2008 by Tisa Silver
Filed under Finance
Last night, Goldman Sachs and Morgan Stanley dropped their investment bank status to convert to bank holding companies.
The conversion will allow them to access emergency funding from the Federal Reserve and replaces their regulatory body, the SEC, with the Federal Reserve. As such, both banks will be subject to more strict regulation and capital requirements.
The Fed has already extended resources typically reserved for commercial banks to the investment banks. Looks like the organizational change just makes it okay on paper to do what has already been done in practice.
Is this organizational change just a sugar-coated bailout?
