WSJ opinion: Private Equity Can Save the Banks

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http://online.wsj.com/article/SB121443773450405313.html

In recent months a major U.S. investment bank has failed and the global financial-services industry has announced over $350 billion in losses. In response, banks and other financial-services firms have had to raise close to $330 billion in new capital.

It may be tempting to think the worst is over, but this is only the beginning. The International Monetary Fund recently estimated that the global financial sector can expect to realize nearly another $600 billion in losses, while some economists have projected the figure will be closer to $1 trillion. In any case, it is clear that the financial-services industry will continue to need unprecedented amounts of new capital over the rest of this year.

Over the past 20 years, private equity firms have demonstrated the ability to shoulder risk and to improve the efficiency and profitability of the companies they invest in. They are exactly the kind of investors we should attract to the financial-services industry. Restrictions and disincentives, however, dramatically and unnecessarily reduce the pool of capital available to the industry. In addition to increasing the industry's cost of capital, these limitations increase the risk that taxpayers will ultimately be called on to assume some of these burdens.

Look who wrote this...
"Messrs. Sarkozy and Quarles are managing directors at The Carlyle Group. Mr. Quarles was under secretary of the Treasury for Domestic Finance in the Bush administration."

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1. The Bush economic model is a total disaster, why even listen to former

...members of the Bush cabinet for solutions to the problems they created? They would take private equity and loot it as well!