American Express to become commercial bank
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AP
Published: November 11, 2008
The Federal Reserve is citing “emergency conditions” for allowing credit card giant American Express to become a commercial bank.
The decision opens the door to American Express being able to accept deposits and permanently access low-cost financing from theFed.
More AmEx consumers are having trouble paying their bills and the value of its primary assets has been declining. That’s made it harder for the company to borrow to pay for daily operations. AmEx revealed severe financial troubles late last month, when it laid off about 7,000 people, or 10 percent of its global work force.
In a statement, AmEx says becoming a bank holding company will give it “maximum flexibility and stability.“
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