Basel acts on private equity losses

The proposal was issued last month in the wake of a series of bank admissions of large private equity losses. For example, last month Deutsche Bank wrote down €700 million and in July JP Morgan Chase wrote down $1 billion.

The capital treatment of banking book equity investments – which ballooned during the late-1990s bullish stock market– has been a growing concern for regulators. US Federal Reserve chairman Alan Greenspan hinted at the risks of private equity’s growing share of bank assets

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