A coalition of U.S. state pension funds is supporting the private equity industry's opposition to new rules on takeovers of troubled lenders, the Financial Times reported on its website.
The measures would have a chilling effect on private capital participation in the acquisition of failed banks, the state pension funds said in a letter to the U.S. Federal Deposit Insurance Corporation, according to the paper.
The warning by funds from states including New York, New Jersey and Oregon is expected to strengthen the buy-out industry's lobbying against the proposed measures, the paper said.
The FDIC will meet next week to vote on a proposed policy that would force private equity groups to maintain high capital levels and put a large amount of their own money at stake when investing in failed banks.
The FDIC provoked a backlash when it proposed the guidelines in July and is expected to soften the policy when it meets on August 26.
The FDIC, the New York State Office of the State Comptroller, the New Jersey Division of Pension and Benefits and the Oregon Public Employees Retirement System could not immediately be reached for comment outside regular U.S. business hours.
(Reporting by S. John Tilak in Bangalore; Editing by Jon Loades-Carter)