Fed approves American Express as bank holding company
WASHINGTON/NEW YORK (Reuters) - The Federal Reserve Board has approved an application by American Express Co to become a bank holding company, the central bank said on Monday.
The move will allow American Express to secure funds from deposits, which could be cheaper than borrowing in bond markets.
"In light of the unusual and exigent circumstances affecting the financial markets ... the Board has determined that emergency conditions exist that justify expeditious action on this proposal," the Fed said in a statement.
American Express follows Goldman Sachs Group Inc and Morgan Stanley, which became bank holding companies after decades of having relied on debt markets for funding.
American Express' borrowing costs relative to a benchmark rate have risen dramatically this year as investors have become increasingly skittish about the company facing rising customer defaults.
(Reporting by Patrick Rucker in Washington and Dan Wilchins in New York; Editing by Dan Grebler; editing by Jeffrey Benkoe)
