Banks may shed private equity assets in Obama plan

January 22, 2010 Share Print 0

U.S. President Barack Obama’s plan to limit financial risk-taking could force banks, such as Goldman Sachs or JPMorgan, to shed parts of their private equity operations.

Among the proposals, which require congressional approval, is that banks or financial institutions that own banks would not be able to own, invest in or sponsor private equity funds unrelated to serving customers.

A number of banks have sizeable private equity interests, for example, JPMorgan’s One Equity Partners, manages $8 billion of investments and commitments for the bank, while Goldman Sachs has a vast private equity business, and invests its own capital in its funds.

source: Reuters

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.