By 11 November, 2008

Credit card giant American Express has got the Federal Reserve’s nod to become a bank-holding company. Under the radical revamp, American Express and its affiliate American Express Travel Related Services would be transformed into bank holding companies, regulated by the Central bank to gain an easier access to the Federal Reserve's emergency-lending facilities, but also will be subject to greater scrutiny by regulators.  The Reserves board said that the decision has been taken "In light of the unusual and exigent circumstances affecting financial markets", justifying the fast approval of the company's application. The Fed waived the normal 30-day waiting period on the application.  The move would also make American Express a receiver of US Govt's bailout package. The last day for banks to apply for government capital is on Thursday, and this move will qualify American Express for it.  

New York-based American Express has been suffering a lot of credit card defaults as unemployment takes its toll in the US. Legendary investor Warren Buffet also holds around a 13% stake in the company.

It was only in September, that Wall Street’s two biggest investment banks, Goldman Sachs and Morgan Stanley shed investment banking to become bank holding companies. Both the banks got $10 billion each from the Treasury as part of the bailout package. The Fed authorised credit to the two firms "against all types of collateral" that commercial banks can use to get loans from the central bank.

All these developments increasingly signal the end of Wall Street which was till now a group of lightly regulated investment banks.

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