Thursday, July 10, 2008

Why You Read EPJ

John Crudele in today's New York Post reports:

A reliable Wall Street source tells me that private-equity firms are poking around the ruins of the banking industry. At least four of these firms are expressing interest.

But there's a problem.

Because of Washington regulations, private-equity funds can't acquire more than 10 percent of a bank without putting themselves in a precarious financial position.

At that level, the investors would be presumed to be in control of those banks. They'd be on the hook if the financial institutions needed more equity, according to this source's interpretation of current rules.

So the Federal Reserve will have to alter these requirements if American investors will ever come to the last rescuer of banks

Jeez John, you have to read EPJ more often. We had this story, months ago, in April! And, even back then we named Carlyle Group as the lead private equity trying to get the bank regs changed. It all right here, John.

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