American Express (Amex) gets Fed approval to convert to commercial bank

November 10, 2008 by · Leave a Comment
Filed under: Industry News 

Looks like consumer debt is now good paper to get Fed loans.  The credit card issuing company is now converting into a commercial bank holding company to get access to the discount window.  My questions is how are they going to pay back the Federal Reserve if borrowers continue to default and the securitization market does not return?  This is the first step for us to start monetizing consumer debts that will most likely be inflationary unless they can pay these loans off.  We are still heading down this slippery slope and at this point it looks like we are determined to inflate our way out of this crisis, which does not look good for people who have savings in dollars.

News:

American Express Co. won Federal Reserve approval to convert to a commercial bank. The Fed waived the normal 30-day waiting period on the application “in light of the unusual and exigent circumstances affecting the financial markets,” the central bank said in a statement in Washington. Chairman Ben S. Bernanke and his colleagues unanimously voted for the action.

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