Erik sent in a question: How do investment banks (Goldman and Morgan Stanley) accept deposits?
According to today’s (Sept 22) NY Times, “Both banks already have limited retail deposit-taking businesses, which they plan to expand over time. Morgan Stanley had billion in retail deposits as of Aug. 31 and Goldman Sachs had billion in deposits. ”
I thought that ony banks could accept deposits, not investment banks. (Obviously this will be different after they convert themselves to bank holding companies, as now planned.) Under current law, how are Goldman and Morgan Stanley able to accept deposits?
They do offer money market mutual funds, but these are uninsured investments, not “deposits”.
Thanks.
Our answer was:
Answer by NYC_Since_the_90s
they do it through subsidiaries and employee deposits
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