Goldman and Morgan no longer investment banks
Published : September 2008
The Federal Reserve has made the surprise announcement that Morgan Stanley and Goldman Sachs, the last two independent investment banks on Wall Street, will become traditional bank holding companies, with access to Fed backing.
The move will enable the two banks to raise funds by opening commercial bank branches and to compete with such firms as Citigroup and Bank of America. The move signifies the end of an era for Wall Street as the investment bank model is abandoned, firms are given permanent access to Fed funds and tighter regulation comes into force.
Since the beginning of the global economic crisis, investment houses Bear Stearns and Lehman Brothers have both collapsed and Merrill Lynch has been bought out by Bank of America.