Overnight repos to FDIC insurance: Goldman Sachs' GS Bank, an Internet bank
Overnight repos to FDIC Insurance:
"Goldman’s ability to dabble in businesses more typical of a corner bank branch than a Wall Street powerhouse dates back to a 2008 change in regulatory classification—one that gave the firm permission to enter the same businesses as plain-vanilla commercial banks. But this doesn’t explain why Goldman is just getting interested in the opportunity now. The reason for that is technology, which has come a long way since Goldman, along with its rival Morgan Stanley, got emergency approval eight years ago to become a bank holding company.
"That change in designation put two of the last big, independent investment banks under the official purview of the Federal Reserve. The move was meant to make the firms eligible for the same backstops available to commercial banks, and to inspire confidence in a market still absorbing the initial shock of a cascading financial crisis. But it also meant that for the first time, these firms could build their own retail bank branches."