Question

During the Financial Crisis of 2007-2008, Goldman Sachs, Morgan Stanley, and other financial firms with heavy exposure to the mortgage-related problems rushed to become bank holding companies in order to a. obtain bailout money from Congress. b. follow the order of the U.S. Treasury. c. acquire funds from the general public. d. get massive loans from the Fed.

Answer 1

Answer:

The answer is: D) Get massive loans from the Fed

Explanation:

Remember the phrase too big to fail? Most American "big" banks were at the brink of bankruptcy and the whole global financial system was about to collapse. At this point the US government loaned them money, tons of money, to avoid them from going bankrupt. In order for big banks to be eligible for those bank loans, they had to become bank holding companies.