Credit card icon American Express is joining the ranks of the commercial banks, standing in line with Goldman Sachs and Morgan Stanley. But becoming a bank holding company is probably going to be a whole lot easier for American Express to stomach — they certainly have more experience dealing with the huddled consumer masses than the remaining investment banks. 

Requiring Amex to behave more responsibly than, well, many of its clients, surely cannot be a bad thing for the financial system. The deal gives Amex lower borrowing costs and more access to government money. A cynic might suggest that cardholders won’t see these benefits, but as long as they keep taking the card with them when they buy new plasma TVs, all should be well with the U.S. economy. 
 
Amex is the fourth-largest U.S. credit card issuer. Like its peers, it continued pumping out credit well into the housing crisis. Now, with delinquencies up and incomes falling, and the market for its assets (our cruddy debts) evaporating, its best opportunity for salvation is to turn to heavily indebted taxpayers. 
 
As a bank holding company, Amex will be able to issue bonds that are government guaranteed through June 2012, and apply to receive money under the $700 billion TARP, which is making direct investments in banks, insurers and possibly other financial companies. So getting their capital base up to commercial bank standards should be no problem. Keeping it there will be a neat trick with credit markets having become as flimsy as plastic. 

Deals of the day:

* Japan’s Mitsubishi Rayon said it will acquire unlisted British chemicals producer Lucite International for $1.6 billion.

* Private equity firm Actis said it had paid $50 million for a majority stake in Chinese hot pot chain Xiabu Xiabu, in a bet that affordable and fast food can withstand the country’s economic slowdown.

* Swiss dental implant maker Nobel Biocare said it is buying privately owned Canadian prosthetics software design company BioCad for 26 million euros ($33.53 million).

* Arc Capital said it has invested $65.8 million in cash for a minority interest in Chinese home improvement chain Orient Home Decoration & Building Materials Co. Ltd.

* Deutsche Lufthansa has temporarily broken off talks to buy Scandinavia’s loss-making airline SAS, a source familiar with the matter said.