The Fed has approved Goldman Sachs and Morgan Stanley's requests to become bank holding companies. Bald and Co. also said that they will extend additional lending to the firm's broker-dealer, in order "to provide increased liquidity support to these firms as they transition to managing their funding within a bank holding company structure." Dealbreaker was additionally asked to pass on the message that if anyone from Goldman is reading right now and has any other demands-- pizza,* rim job,** whatever-- to get in touch, because if it wasn't obvious already, no one says no to GS.
Here's the Fed's official statement:
The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies.
To provide increased liquidity support to these firms as they transition to managing their funding within a bank holding company structure, the Federal Reserve Board authorized the Federal Reserve Bank of New York to 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. In addition, the Board 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.
And this is what Goldman had to say. Apparently the current state of the market merely pushed them in a direction they were already going:
"When Goldman Sachs was a private partnership, we made the decision to become a public company, recognizing the need for permanent capital to meet the demands of scale. While accelerated by market sentiment, our decision to be regulated by the Federal Reserve is based on the recognition that such regulation provides its members with full prudential supervision and access to permanent liquidity and funding," said Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs. "We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources."
Still waiting for Dick Fuld's thoughts on the matter.
*See if you can guess who they're going to make deliver it.
**To be administered by ____ ______?