in Washington June 25, 2008. REUTERS/Jim Bourg (UNITED STATES)
Every company is willing to be a bank because they can access loan directly to the Fed. After the investment and local banks, the three big auto makers, AIG and Ambac. Now, American Express Co. (AXP) won fast approval to become a bank-holding company, helping the credit-card giant gain access to a chunk of the $700 billion in federal funds being pumped into financial firms. But The Wall Street Journal reported today that it isn't clear whether American Express applied for financial aid provided through TARP. We also still wait for the six big brokers which asking for the government bailout.
The move shows how quickly financial-services firms that have long relied on the capital markets are racing to shore up their funding sources as the credit crisis drags on and economic turmoil spreads around the world.
The specter of a steep recession has fueled investor worries about AmEx's financial position; even though its two bank units already have access to the Federal Reserve's discount window. Last month, the New York Company said it could keep itself going for at least a year if it were shut out of the credit markets.
American Express has total consolidated assets of about $127 billion and two bank units: American Express Centurion Bank, which operated as an industrial loan company under Federal Deposit Insurance Corp. supervision, and American Express Bank, which was regulated by the Office of Thrift Supervision. Each has assets of about $25 billion and deposits of about $7.2 billion, the Fed said. Centurion is being converted to a bank, according to the Fed order.
Banks, thrifts and bank-holding companies have a Nov. 14 deadline to apply for a capital infusion from the government. Fed officials are reviewing applications from a small number of other firms, including GMAC LLC, the auto and home lender.
Related Posts :
Sources :
- The Wall Street Journal: AmEx Gets Access to Bailout Fund, November 11, 2008
Bloomberg: American Express Wins Fed Approval to Become Bank (Update1), November 11, 2008 04:26 EST
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