Financial Times FT.com

Fed may ease rules on bank buy-outs

By James Politi in Washington and Henny Sender in New York

Published: June 27 2008 00:21 | Last updated: June 27 2008 00:21

The Federal Reserve is considering making it easier for private equity firms to take large stakes in banks, without being subject to existing restrictions and commitments, as part of efforts to encourage capital-raising in the troubled US financial system.

In the past 20 years, some lawyers say the central bank has been increasingly onerous in its interpretation of congressional rules triggered by purchases of bank stakes larger than 24.9 per cent.

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