The Federal Reserve Board opened the door this week for holding companies to buy debt that is already in default.

Approving an application by Norwest Corp. Tuesday, the Fed said buying this so-called junk debt is "closely related" to banking and thus permitted under Reg Y.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.