• Federal Reserve Lowers Barriers to Private Equity Firms' and Other Investors' Proposed Minority Equity Positions in U.S. Banking Organizations Without Triggering Fed Regulation
  • October 6, 2008 | Author: Carl A. Fornaris
  • Law Firm: Greenberg Traurig, P.A. - Miami Office
  • On September 22, 2008, the Board of Governors of the Federal Reserve System -- faced with pressure to increase funding sources for capital-hungry U.S. bank holding companies and their bank subsidiaries -- issued a much-anticipated policy statement regarding the circumstances under which minority investors such as private equity firms may invest in banking organizations without causing the investor to be deemed to exert a "controlling influence" over the management or policies of a bank. If a minority investor is not exerting a "controlling influence," the investor is not considered a "bank holding company" subject to cumbersome Fed regulation.