Washington, Sept. 22 : Goldman Sachs and Morgan Stanley, the last surviving big investment banks on Wall Street, have become regulated banks.

In a statement issued at 9.30 p. m. local time Sunday the Federal Reserve said it had approved their applications to become bank holding companies, subject to regulation by the Fed.

According to the Financial Times, during the transition period the Fed will make loans to both entities and to the broker-dealer subsidiary of Merrill Lynch against collateral acceptable for posting either by a bank or a securities firm.

The Fed will also lend to Goldman, Morgan and Merrill''s London-based broker dealer subsidiaries directly.

The Fed approval is subject to a five-day waiting period for potential antitrust issues.

The move effectively spells the end of the investment banking industry as a separate sector, leaving behind only small boutique securities firms.

It means that both Goldman Sachs and Morgan Stanley will be subject to bank capital requirements that will be phased in over a transition period. (ANI)