How do investment banks (Goldman and Morgan Stanley) accept deposits? | All About Money Online

According to today’s (Sept 22) NY Times, “Both banks already have limited retail deposit-taking businesses, which they plan to expand over time. Morgan Stanley had $36 billion in retail deposits as of Aug. 31 and Goldman Sachs had $20 billion in deposits. ”

I thought that ony banks could accept deposits, not investment banks. (Obviously this will be different after they convert themselves to bank holding companies, as now planned.) Under current law, how are Goldman and Morgan Stanley able to accept deposits?

They do offer money market mutual funds, but these are uninsured investments, not “deposits”.

Thanks.

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