American Express became the latest financial group to convert to a bank holding company. The surprise move will give the credit card group permanent access to Federal Reserve funds and could facilitate consolidation in the sector.
The Fed said AmexCo??s application had been approved more quickly than usual because of the ??emergency conditions? and ??the unusual and exigent circumstances? in financial markets.
According to the Fed, AmexCo had $127bn in total assets but retail deposits of just $7.2bn ?? another sign that the financial crisis is prompting regulators to accept bank holding applications from companies with little retail banking presence.
Several other financial groups, including GMAC, General Motors?? finance arm, have also applied to become bank holding companies in the hope that Fed funds would provide some shelter from the current crisis.
