Goldman Sachs, Morgan Stanley To Be Bank Holding Companies

The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS), is a large global bank holding company that engages in investment banking, securities and investment management. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. Goldman Sachs has offices in all major world financial centers.

The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks — Goldman Sachs and Morgan Stanley — to change their status to bank holding companies.

The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.

The extraordinary Sunday announcement places the last two independent Wall Street investment banks under supervision by bank regulators and opens a wider range of credit to the two firms.

In a statement, the Federal Reserve said its board had approved the applications of Goldman Sachs and Morgan Stanley to become bank holding companies and authorized credit to the two firms "against all types of collateral" that commercial banks can use to get central bank loans.

The Fed also made these collateral arrangements available to the broker-dealer subsidiary of investment firm Merrill Lynch, which was bought a week earlier by Bank of America at the same time that another Wall Street giant, Lehman Brothers, filed for bankruptcy.