From Reuters:

The Federal Reserve approved applications on Sunday from Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) and Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) to become bank holding companies, putting them directly under the regulatory supervision of the U.S. central bank, the latest step to restore calm to chaotic financial markets.

To provide increased liquidity to the companies, the Fed agreed to lend to the firms’ broker-dealer subsidiaries on the the same terms as the Fed discount window for banks and the central bank’s Primary Dealer Credit Facility lending window for investment banks.

Ted, things are afoot at the Circle-K.

By adopting the status of a bank holding company, both investment banks will now be allowed to open commercial banking arms which will be able to take on deposits - that will help both firms’ beleaguered bottom lines and allow them to take in much-needed capital. It also brings them under the regulatory scrutiny of the U.S. central bank.

money pig, originally uploaded by MissLindsay.