Fed may ease rules on bank buy-outs

Discussion in 'Wall St. News' started by ASusilovic, Jun 27, 2008.

  1. The Federal Reserve is considering easing rules to enable private equity firms to take large stakes in banks without being subject to existing restrictions and commitments, as part of efforts to encourage capital-raising in the troubled US financial system. The Fed has been criticised for its onerous interpretation of congressional rules triggered by purchases of bank stakes larger than 24.9%. Under pressure from buy-out groups such as Carlyle, keen to pour money into US banks but unhappy with limitations on investments by groups other than “bank holding companies”, the Fed is considering some changes, say sources close to the debate. However, the discussions are preliminary and nothing is imminent, they say.