![]()
- Joint Effort Needed to Unwind Stimulus: APEC Leaders
- Obama to Outline Strategy to Boost US Exports to Asia
- Friday May See 'Risk Trade' Stalling; Dollar in Focus
- Job Market Politics to Keep Interest Rates Low
- AIG, Symbol of Crisis, Watches Its Stock Zoom Back
- Cities With the Most Home Price Reductions
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Bill Gates Praises Apple's Jobs for 'Saving the Company'
- Is Euphoric Market Ignoring Warning Signs?
- EXCERPTS and IMAGES: Warren Buffett & Bill Gates - Keeping America Great
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Gold Is a Bad Inflation Hedge—Like Oil: Stock Picker
- Intel's Andy Bryant Offers An Explanation
- US 'Actively Working' on Weaker Dollar: Fund Manager
- Options Boil on Biotech Buyout Rumors
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Activision Blizzard's "Modern Warfare 2" Sales Break Records
- 5-Star Manager's 5 Stocks for Changing Markets
MOST SHARED
- CNBC TRANSCRIPT: Warren Buffett & Bill Gates - Keeping America Great
- Pharma & Social Media
- Is Euphoric Market Ignoring Warning Signs?
- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Warren Buffett and Bill Gates Share Their 'Optimism' With Eager Columbia Business Students
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Obama to Outline Strategy to Boost US Exports to Asia
- China Fourth Quarter Growth Could Hit 10%: Official
- Alleged Florida Ponzi Scheme Could Top $1 Billion
- Video Game Sales Plunge, but Have They Hit Bottom?
The U.S. Federal Reserve is considering steps to make it easier for private-equity firms and others to invest in banks, the Wall Street Journal reported on Thursday, a move that could open the door to more capital for cash-starved banks.
![]() |
CNBC.com |
"We are looking at ways we can make those things more workable and gain from the experience we've had over the past few years," Federal Reserve general counsel Scott Alvarez told the paper.
Federal Reserve officials were not immediately available to comment on the report.
Any easing of obstacles to private equity firms making sizable investments in banks could be a catalyst for cash infusions. That has the potential to relieve some of the pressure on lenders, many of which need to shore up balance sheets amid the worst banking crisis in decades, the paper said.
Banks have raised money from government investment funds, mutual funds and other investors, often through public offerings of stock or other securities.
There are indications that the capital pool is starting to dry up at a time when many financial institutions are still bleeding.
Fed officials recently have met with big buyout firms, including J.C. Flowers, Carlyle Group, Kohlberg Kravis Roberts and Warburg Pincus, and banking lawyers to discuss the obstacles, according to people familiar with the matter.
In an opion article in Thursday's printed edition of the Journal, Carlyle directors Randal Quarles and Olivier Sarkozy, said private equity firms stand ready to invest in the bank sector should the restrictions get eased.
Under federal law, to own more than 24.9 percent of a bank, an entity must register as a bank holding company, which is subject to heavy regulation and can be forced to serve as a "source of strength" for the bank, the Journal said.
Ownership of more than 9.9 percent of a bank also subjects the entity to regulatory scrutiny to ensure that it isn't controlling—or even influencing—the bank's operations.
The Fed can't change those laws, but it has room to maneuver in how it interprets them.
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- They may have wrecked their companies or saved our economy. Tell us what you think.
- Big pharma embraces social media, but how much should a tightly regulated sector say on Facebook or Twitter?
- A European dating site finds lovelorn singles from one country to be consistently uglier. Which is it?
- Contributor David Pogue looks at two of the latest efforts to perfect the digital pocket camera.
- PepsiCo is ramping up its onsite health facilities for workers.













