American Banker: Regulators Need to Give PE a Chance to Help Community Banks Thrive
Regulators Need to Give PE a Chance to Help Community Banks Thrive
By Barbara A. Rehm
American Banker
December 14, 2011
Community banks are fighting the wrong battle in Washington.
The sector is starving for capital, and yet debate is dominated by complaints about regulatory burden. While that’s an important issue, it pales in comparison to the problem of financing future growth.
Quite simply, the community banking sector will not survive without better access to capital.
“If you take an industry and you cut it off from capital structurally, it will just die,” says Mark Kaufman, Maryland’s banking commissioner.
That structural cutoff came about because institutional investors now dominate our markets, and federal rules keep investments in community banks so small that institutional players just aren’t that interested.
“If you had your choice and you could get passive, retail capital that doesn’t necessarily focus on return and is investing partially on a social desire to serve the community, that would be fabulous,” Kaufman says. “But I don’t think you can build a banking industry on that.”
Please click here for the full article.
