Fed makes it easier to take stakes in banks

[DLnyc]

Source: Associated Press

WASHINGTON (AP) — The Federal Reserve made it easier Monday for private equity firms and other types of investors to take minority stakes in banks, a move that could usher new capital infusions to cash-hungry banks and help them cope with credit stresses.

The Fed issued policy guidance that said it will allow investors under certain circumstances to take up to a 33 percent equity stake in a bank without running into regulatory hurdles.

Such an investment wouldn't constitute a "controlling interest" and thus wouldn't trigger regulatory oversight. Historically, stakes of 25 percent or more were viewed as triggering regulatory oversight.

The Fed also is making it easier for a minority investor to have representation on a bank's board and would allow a minority investor to more freely communicate with banking management.

. . .

Read more: http://ap.google.com/article/ALeqM5iNgdLsqil4S-XRFd1CJVdMG9ZOjAD93C3G880

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Wow. Deregulate the banking industry some more. Somehow, this is not a move that gives me confidence in the future stability of the ordinary banking industry, after the investment banks finish crumbling.

[Roland99]

1. Domino Theory in action.

Where the dominoes are the horridly bad decisions by the Republican oligarchs running..er...ruining the country.

[bluesmail]

2. Crap It's Carlyle. Look out!

[Tutonic]

3. Holy crap! Who is running the Federal Reserve? Daffy Duck?

Minority interests don't require regulatory oversight. So a 24% interest in the superbank created by Golman Sachs could mean billions!!!!!! And no oversight?! I pray that Henry Paulson grows a tail like the rest of the rats!!!!!! And where is that punk Newt Gingrich with his stupid plan??!!!!