What to Make of the New Crop of Bank Holding Companies

December 9 2008

Subsequent to the September 2008 failure of Lehman Brothers and the passage of the $700 billion Troubled Asset Relief Program (TARP), notable investment banks (Goldman Sachs, Morgan Stanley) and the premier credit card issuer (American Express) all received approval to become bank holding companies (BHC) regulated by the Federal Reserve.

In addition to gaining access to the Capital Purchase Program to raise Tier 1 capital, these new bank holding companies have since received speculative attention regarding their “commercial banking” intentions including possible acquisition plans and Internet banking initiatives.This brief examines the potential of this new group of banking wannabes.

Readers may also want to review A & O Brief 2008-20 (November 20, 2008) which analyzes the journey of four large insurance companies into the banking world.

Read more to find out how to receive access to this and other A & O Briefs.