Wall Street’s two remaining investment banks will now operate under the supervision of the Federal Reserve as the financial market storm threatened to drag them down along with their peers.
Goldman Sachs and Morgan Stanley will now operate as bank holding companies, which will allow them easier access to credit.
This move contributes to the Federal Reserve’s growing number of bail outs, following that of AIG last week, its US$700 billion (A$870 billion) credit market rescue plan announced on Friday, and the seizure of Freddie Mac and Fannie Mae earlier this month.
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