[Homestead] Amex to become bank to qualify for bailiout money
bobford79 at yahoo.com
Mon Nov 10 22:07:56 EST 2008
Now, if circle K, Lqiour stores, horse tracks , and I , can all become banks, and therefore eligible for tax-payer paid gov't bail-out, I wouldn't be quite as angry at this crony capitalistc (socialim in another name)b.s.
Save everyone who donates to politicians and every large group or faction that works for and donates to politicians, and we end up with a system oif noting but kickbacks and bribes, Only the workers -- the succesful, the non-politically connected will receive nothing but the bills to pay to keep the bail-out recepients in the undeserved pretentios lifestyles..
Never forgot these people have never been the best and the brightest. Instead, they have proved to be is abject failures. Thus, in this country, they must now be rewarded..................bobford
Tuesday, November 11, 2008
BUSINESS NOVEMBER 11, 2008 AmEx Plans To Become Bank Firm
By ROBIN SIDEL and JON HILSENRATHArticle
more in Business »American Express Co. won fast approval to become a bank-holding company, giving the credit-card giant quicker access to a chunk of the $700 billion being pumped into financial firms by the federal government.
The move shows how fast financial-services firms that 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.
AmEx's two bank units already have borrowing access to the Federal Reserve's discount window, and the New York company said last month that it had enough liquidity to keep itself going for at least a year even if it were shut out of the credit markets.
"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," Kenneth I. Chenault, AmEx's chairman and chief executive, said in a statement.
The company said the move puts it on equal footing with competitors that already are structured as bank-holding companies.
"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 Mr. Chenault.
The move appears to indicate that AmEx will join the slew of financial institutions that have applied for the Troubled Asset Relief Program, or TARP. The company, however, hasn't yet done so.
Under normal circumstances, it would take a firm like AmEx months to win approval of such a switch. But the Fed waived its normal procedures to expedite the move.
By winning quick approval to become a bank holding company, AmEx is now in a position to turn to the Treasury Department for a piece of the funds it is investing in financial firms to bolster their capital. The program is open to banks, bank holding companies and thrifts. Firms have a Nov. 14 deadline to apply for a government investment, which forced American Express to move quickly.
AmEx is described in the Fed's order approving the switch as well-capitalized. But the firm is expected to quickly turn to the Treasury for an investment to bolster its position.
The switch also puts American Express in a position to acquire other banks, and get access to a broad base of customer deposits, though it's not clear if that is part of the firm's short-term plans.
In a conference call to discuss third-quarter earnings last month, Mr. Chenault appeared to play down the potential that the company would acquire a bank, saying that the focus on retail deposits "comes with a lot of other stuff." Furthermore, he said, "we think we are evolving a funding strategy that will allow us to navigate through these challenging times."
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