Two of the last remaining major investment banking houses will convert to bank holding companies under emergency action taken by the federal government Sunday night.

Goldman Sachs and Morgan Stanley will become bank holding companies, a press release Sunday from the Federal Reserve said.

The move is subject to a statutory five-day antitrust waiting period.

During the waiting period, the Federal Reserve Bank of New York has been authorized by the Federal Reserve Board "to extend credit to the U.S. broker-dealer subsidiaries of Goldman Sachs and Morgan Stanley against all types of collateral that may be pledged at the Federal Reserve's primary credit facility for depository institutions or at the existing Primary Dealer Credit Facility."

That move is designed to increase liquidity while they transition to the new structure.

In addition, the primary credit facility has been made available to the broker-dealer subsidiary of Merrill Lynch, which has agreed to be acquired by Bank of America Corp.

The fed noted that the London-based broker-dealer subsidiaries of the three investment banking firms have also been authorized to utilize the primary credit facility.

Treasury Secretary Henry M. Paulson Jr., who has been faced with unprecedented financial turmoil during his tenure, was the chairman and chief executive officer of Goldman prior to joining the Bush administration in 2006. When he left Goldman, he sold $500 million in Goldman stock without being taxed on his gains because of tax laws for federal appointees who are forced to sell before they take office.