Alerts

Investments in Banks: Possible Regulatory Developments

June 30, 2008

Several news sources recently have reported that the Federal Reserve may be willing to re-examine some of its restrictions and requirements concerning investments in U.S. banks, in light of the need of many banks to raise additional capital. The Fed (and other relevant bank regulators) has the ability without Congressional action and, in many cases, without formal rulemaking to ease certain restrictions that have been problematic for many investors seeking to invest in U.S. banking organizations. Private equity funds are clearly interested in investing in banks and would benefit from an easing of current restrictions. Hedge funds considering significant investments in banks would similarly benefit, as would any investors looking at co-investments or “club deals” involving investments in banks.