Morgan Stanley (NYSE:MS) and Goldman Sachs, the remaining two large U.S. investment banks, requested the change, which gives them greater access to federal lending but additional regulatory oversight.

Previously regulated by the Securities and Exchange Commission, the two investment giants will now have restrictions akin to those placed on commercial banks, The New York Times (NYSE:NYT) reported Monday.

The other three large Wall Street investment banks met separate fates over the past six months. Bear Stearns (NYSE:BSC) collapsed in March and was bought by J.P. Morgan and Chase Co (AMEX:CCF) with help of a $30 billion federal loan. Last Monday, Lehman Brothers Holdings Inc. (NYSE:LEH), filed for Chapter 11 bankruptcy protection and Bank of American purchased the third -- Merrill Lynch (NYSE:MER) -- for $50 billion.

The era of split financial and commercial banking began with Glass-Steagall Act, passed during the Great Depression, the Times reported.

By agreeing to the restrictions, the firms will have far tighter limits on what they can borrow relative to their capital. This makes them financially sound but lowers their potential for profits, the Times reported.