Private Equity Players Want In on Banking

Even in the midst of the banking crisis, numerous entities are willing to buy the big banks, the New York Times reports. Private equity groups like J.C. Flowers & Company are itching to snap up the cash-strapped behemoths, but the Fed won’t let them. It’s worried that selling banks to the notoriously risk-loving private equity crowd would invite a future crisis.

“I don’t think the Republic is going to be brought to its knees if private equity owns banks, personally,” says J.C. Flowers, who last year bought a tiny Missouri institution just for its national bank charter. The government fears non-banks manipulating the banking system, but private-equity tycoons counter that what the system needs is huge cash infusions—something only they are in a position to provide. "I find it to be an extraordinary time to invest," says Flowers.