Last major investment banks change status

September 22, 2008 9:42:05 AM PDT
The Federal Reserve says the last two major investment banks - Goldman Sachs and Morgan Stanley - can immediately move forward on plans to become bank holding companies. The Fed on Monday said the normal five-day waiting period required under law could be skipped after consulting with the Department of Justice.

The Fed announced late Sunday it had approved the request, which will allow Goldman and Morgan Stanley to create commercial banks that can take deposits, bolstering the resources of both institutions.

The change is the latest seismic shift on Wall Street as the financial system tries to cope with mounting problems that began more than a year ago with the subprime mortgage crisis.