Today AmEx became a bank holding company. It became a third financial company (after Goldman Sachs and Morgan Stanley) to convert to a bank holding company since the global credit crunch worsened in September. This change will allow the company to borrow directly from the Fed at a much lower rate than before, but this will also subject it to greater federal regulations.

Although this is a positive move for American Express, it also shows how desperate it was to improve its funding sources. Even with the Fed's latest efforts to boost the commercial paper activity, many companies find themselves left high and dry with limited access to funding. AmEx is one of the more financially sound companies and yet it was forced to become a bank holding company, a move significantly changing their long-term growth strategies and possibly limiting opportunities for growth because of the increased oversight. One can only imagine how many more companies are out there trying to become bank holding companies as well and may fail if they don't achieve that status.

What I am wondering about and what I couldn't find an answer for on the Web is this: how do companies get out of being a bank holding entity and is there a history of such actions? If so, here is what these companies can do: shore up their balance sheets, stabilize operations and wait out the credit crunch crisis. Realistically, it will take 5-10 years for the companies like American Express, Goldman Sachs, and Morgan Stanley to be in a position where they don't need to be bank holding companies anymore. So, at that point they could probably sell off their banking units for a tidy profit and grow their core businesses (e.g., businesses that were considered core to their operations before this crisis) at a much faster pace than they could while being bank holding companies. Is this really such a crazy idea?