Monday, November 10, 2008

American Express Approved as Bank Holding Company

The Federal Reserve Board on Monday announced its approval of the applications and notices under sections 3 and 4 of the Bank Holding Company Act by American Express Company and American Express Travel Related Services Company, Inc., both of New York, New York, to become bank holding companies.

With The Carlyle Group's Daniel F. Akerson and Yale University president Richard C. Levin on the Board of Directors, Amex is certainly part of the inner circle.

Don't be surprised if the next announcement is $10 billion in "bailout" money to Amex.

“Given the continued volatility in the financial markets, we want to be best positioned to take advantage of the various programs the federal government has introduced or may introduce to support U.S. financial institutions. We will continue to build a larger deposit base to broaden our funding sources. With Federal Reserve oversight we should gain greater access to the capital on offer under the current and any future government-sponsored programs. This decision to become a bank holding company does not fundamentally change American Express' core focus on the payments industry, nor will it require any significant divestitures,” said Kenneth I. Chenault, Chairman and Chief Executive Officer, American Express

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