Shortly after the AIG bailout, US Federal Reserve came up with another strategic move by allowing both struggling investment bankers Goldman Sachs and Morgan Stanley to convert to commercial bank holding companies. The move allows both companies broader access to borrow federal money and the ability to build a stable base of banking deposits.
However, they will now be scrutinized under Federal Reserve, which imposes a much tighter regulation, compared to the present Securities and Exchange Commission.
The move is to prevent further financial crisis experienced by the collapsed former investment bankers Bear Stearns, Merrill Lynch and Lehman Brothers.
Shortly after the event, savvy investment guru Warren Buffett's Bershire Hathaway is investing USD5billion in Goldman Sachs.
Time to follow the footstep of Warren Buffett?
Wednesday, September 24, 2008
Saving Private Investment Bankers
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