American Express to become holding company

WASHINGTON, Nov. 11 (UPI) -- The U.S. Federal Reserve granted American Express Co. approval Tuesday to become a bank holding company, opening the door for it to use federal bailout funds.

Both American Express and American Express Travel Related Services Co. Inc. were afforded the new status, the Fed said in a statement.

"Given the continued volatility in the financial markets, we want to be best positioned to take advantage of the various programs the federal government has introduced or may introduce to support U.S. financial institutions," Chairman and Chief Executive Officer of American Express Kenneth Chenault said in a statement.

"Everybody wants to be a bank because everybody wants access to government funding," Craig Maurer, an analyst at Calyon Securities told The Wall Street Journal.

Similar to recent permission granted to Goldman Sachs Group Inc. and Morgan Stanley, both of which became bank holding firms in September, the Fed accelerated the process for the credit card giant.

The Fed said the approval was given high priority due to "unusual and exigent circumstances affecting the financial markets."