Good, but please scream louder just so we're sure you are in pain. Just as in the UK, this group is trying to move back to the highly leveraged world that brought us into this mess. Sure they can make huge profits but we have a pretty good understanding about the losses too. The problem here is that they've socialized those losses and want to pretend as though it never happened. When do investors get their bailout rewards from these people? Let them go ahead and have a hissy fit. If they don't like it, tough. Until they can show benefits to the broader market forget about what they have to say. Somehow they think that they are important enough to demand anything.
But preliminary guidelines proposed by the Federal Deposit Insurance Corp on Thursday will deter the industry from investing in banks, executives warned.
"The issue that the regulators have to deal with is that banks need capital, but they don't want people to make too much money," said Steven Kaplan, a professor of finance specializing in private equity at the University of Chicago. The FDIC proposals would make it harder for investors to make money, he said.
"If you're a private equity investor you have to be a little crazy to want to deal with the FDIC and the government," Kaplan added.
The guidelines call for a Tier 1 leverage ratio of 15 percent for three years. Currently, well-capitalized banks must have Tier 1 capital of at least 6 percent of risk-weighted assets.
The new regulations would call for private equity groups to maintain their investments in banks for three years, unless they get special approval from the FDIC.
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