How Will Tomorrow’s Financial Regulation Announcements Affect Private Equity?
Tomorrow, President Obama will announce his proposal for financial regulation reform, which is expected to include elimination of the Office of the Thrift Supervision. So will the new financial regulations affect private equity? Technically, they won’t. Indirectly, they will. The Office of the Thrift Supervision (OTS) is the agency known for being more lenient on private equity investments in banks. It’s the agency responsible for approving acquisitions of both Indymac and BankUnited by consortiums of buyout firms. With the elimination of the OTS, it’s possible that approval for these types of transactions could fall to the Fed, which currently regulates bank holding companies. Notably, the Fed has yet to approve a bank buyout by private equity.
