The new rules state that the amount of common equity - the best capital for absorbing losses - that banks have to hold will rise from 2% of their loans and investments to 7%.
For instance, when Northrop Grumman and Lockheed Martin sold off units engaged in providing highly classified services for spy satellites due to new conflict-of-interest rules, the buyers were private-equity firms.
The Plaza Group claims in bankruptcy filings that it was undone by recent accounting rules that force private equity partnerships to write down the value of their investments in accordance with market valuations, as opposed to holding them at cost.
