Guidelines On Private Equity Investments Soon
http://www.reuters.com/article/newsOne/idUSTRE57300620090804
The Federal Deposit Insurance Corp, or FDIC, is soon expected to finalize a new set of rules on private equity investments in failed banks. Investment in the segment has been stalled for quite some time now for want of new and clearer guidelines. The regulatory body had proposed stringent guidelines for private capital investment in troubled banks and is awaiting comments from various sections before finalizing them. The FDIC proposals have evoked severe criticism from several quarters, especially on the issue of the requirement of a Tier I leverage ratio of 15 percent, which is far higher than the five percent requirement for healthy, well-capitalized banks. It is widely believed that the FDIC will reduce the requirement in its final version to ten percent. The FDIC needs to look into the demands of the private equity segment.
