October 27, 2008 / Law Alert

Private Equity Investment in Banks Federal Reserve Allows Larger Investments in Banks and Bank Holding Companies

The Federal Reserve has recently issued a new policy statement that allows for increased private equity investment in banks and bank holding companies. The new policy allows minority investors to increase their stake in banking organizations without being subject to the requirements of the Bank Holding Company Act of 1956. The Federal Reserve expects the new policy will increase investment by private equity funds and help to remedy the current economic crisis.