PEC Still Not Satisfied with Lowered Capital Requirements on Bank Deals
Naturally the private equity council watched today's FDIC board meeting (see earlier) with great interest--many of its members have already made bank investments, which may not necessarily be exempt from the new investing rules. The PEC, which represents the 11 largest buyout firms in the US, issued a statement today which expresses continued criticism of the 10% capital requirements for banks under the ownership of private equity firms. The FDIC lowered this requirement from its initial proposal of 15%. The PEC was so critical, in fact, that it pulled out private equity's secret pity weapon, reserved only for the direst of situations--the old "We are do-gooders, we invest public pension money" trick. The FDIC wouldn't really want to impose such harsh requirements on the money managers of retired firefighters and teachers, would it? Well, maybe that wasn't the exact wording. The PEC did express appreciation of the FDIC's six-month review period for the rules. A lot can happen in six months, and perhaps the FDIC will loosen its requirements even more at that time. You can read the PEC's official statement below.
