Washington is squeezing small banks and chasing off the private equity investors who could help them, financier Wilbur Ross says.
"Bureaucrats fear private equity players as slippery, clever sharpies and are far more comfortable regulating commercial bankers," he said Monday at ASR's sister publication American Banker's M&A Symposium in New York. Federal banking regulators "clearly restrict private equity more than other owners of banks."
As a result Ross, 74, whose WL Ross & Co. bought a handful of failed U.S. banks after the financial meltdown, has cast his attention to Europe. Regulators there are more welcoming than their U.S. counterparts to buyout specialists interested in bank deals, he says.
Ross is best known in the residential mortgage industry for his investment in American Home Mortgage Servicing Inc., Irving, Texas, which is in the process of changing its name to Homeward Residential.
Ross owns stakes in BankUnited, Sun Bancorp and other U.S. lenders and may continue to acquire other banks, but is eyeing deals along the lines of his large investment last year in the Bank of Ireland.
Europe's debt problems and unresolved real estate troubles should put banks in play in Spain, Portugal, France and elsewhere.
Ross called out three U.S. regulators by name, saying the Federal Reserve Board, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. have imposed too many unfair restrictions on bank investments by firms such as his.
Private equity funds raise money from pension funds and institutional investors to buy companies and sell them at a profit years later.