Definition of private equity: a marvelous system for creating wealth by trading an existing stock of assets back and forth at ever higher prices.
Martin Weale, the director of NIESR, said that the government would need to put more equity into the banking system so that it was better capitalised.
These have now all been nationalised: not in the sense that they are part of government, rather, that we now seem to have one national system of equity capital allocation.
However, despite this infusion into the system, the equity markets still lost 25% of their value since the program was initiated.
With ECB President Mario Draghi and Fed Chairman Ben Bernanke in a monetary arms race to see who can inject more liquidity into the global financial system, global equity markets should enjoy a spectacular finish to the year.
Everyone keeps saying a safer financial system would rely more on equity, less on debt.
The FORBES fund-rating system does this, comparing equity funds against their peers for results over two full market cycles stretching back to August 2000.
What happens to private equity may be a leading indicator of how the crisis in the financial system will affect the rest of the business world, both because private-equity deals are so dependent on large amounts of debt, and because many of the shrewdest judges of corporate value work for private-equity funds.
It has dramatically raised disposable incomes for the poorest without placing extra burdens on the rich, spreading social equity while boosting consumption and bolstering the banking system.
Our banks in 2008 and 2009 were forced by our OCC, FDIC, and Treasury Dept. to raise hundreds of billions in new equity capital which recapitalized the entire US banking system.
The ideal tax system strikes a balance between efficiency and equity.
Hedge funds, private-equity firms and other parts of the shadow banking system should go, along with over-the-counter derivatives (OTCs), collateralised-debt obligations (CDOs) and other nefarious structured products.
We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers and that could pose a conflict of interest.
On the financial front, foreign equity players were allowed to help clean up the banking system and to restructure bubble assets.
John Wheeler, senior manager of equity trading at American Century mutual funds, figures the current system imposes a 0.5% trading cost (one-way) on big orders, between commissions, spreads and the impact such orders themselves have on prices.
The system, called Liquidity Builder, will survey several cash equity and options markets and predict the availability of a Pipeline block trade to match that.
Today, private equity is a single global industry at the heart of the capitalist system, managing far more money than seemed possible in the 1980s (see article).
"The Rise of the Industry Operating System", by Tom Berquist et al. Goldman Sachs Global Equity Research, November 2000.
Loading banks with equity slows the creation of credit, but the reward for a healthy financial system is faster growth over the long term.
ECONOMIST: The banking industry: Three trillion dollars later... | The
For decades some economists have criticized the lopsidedness at the core of the U.S. tax system, which taxes the returns on debt once but the returns on equity twice.
Has the Treasury done enough to increase the tax payable by private equity partners on their carry and to increase the tax payable in general by private-equity partners and their backers who are not domiciled in the UK, so that tax system doesn't favour their kind of financing and investing techniques over others?
They say a radical overhaul of the commission system in Britain makes little sense when America, the world's largest equity market, will continue with today's arrangements, soft commissions and all. (Softing is more generous and more widely used in America than in Britain.) To have a different commission system from international peers would put British fund managers at a disadvantage, or so say London money-men.
Over the last several years the Employees Retirement System of Rhode Island has increased its allocations in alternative investments, including hedge funds and private-equity funds, to 25 percent.
FORBES: Educating Gina Raimondo, Rhode Island's Wall Street-Friendly State Treasurer
Once formally agreed by parliament and member states, the law will begin the most complex and far reaching overhaul of the banking system since the credit crunch, requiring banks over the next six years to strengthen their buffers of equity and liquid assets to Basel standards.
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