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"Banks" is a catchall for a place to deposit or get money. Not all banks are under the regulations of FDIC, like GS, but all banks are under the regulations of
by yardie 13y ago
"Banks" is a catchall for a place to deposit or get money. Not all banks are under the regulations of FDIC, like GS, but all banks are under the regulations of the Reserve.
- maxerickson 13y agoI'm not sure you mean otherwise, but part of the bailout process in 2008 was to allow Goldman Sachs and Merrill Lynch (now part of Bank of America) to become bank holding companies. The major reason was so they could shore up their balance sheets with cheap and safe FDIC insured accounts.
- hnnewguy 13y ago>so they could shore up their balance sheets with cheap and safe FDIC insured accounts. FDIC insured accounts are liabilities on a bank's balance sheet.
- maxerickson 13y agoYou are right, they did it to access a lending facility that was only available to them if they switched their structure. (I made the mistake of talking when I shouldn't have, I wasn't trying to mislead)
- snowwrestler 13y agoOnly commercial banks are under the regulatory authority of the Fed. Until they converted to a bank holding company, Goldmann Sachs was not regulated by the Fed. As an "ivesemt bank" (which is not actually a bank at all), they were regulated by a mishmash of other authorities including the SEC and FTC. That was a major contributing factor to the financial crisis in the first place, and the reason Dodd-Frank expanded the authority of the Fed and FDIC to cover "systemically important financial institutions"--even if they are not banks.