Second, encourage greater private equity investments in many of these institutions. Federal financial regulators appear to be concerned that private equity investments in banks might put depositors’ money at risk, DeBoer noted, pointing to the FDIC’s actions to toughen rules on private equity firms buying failed banks by requiring higher capital ratios and prohibiting sales of banks for at least three years. “Yet, one might think that a compromise could be found to bring much-needed equity into the banking system.”

Lastly, the Treasury Department could provide a series of safe harbors that would enable certain non-US investors to increase their participation in the US credit markets without risk of adverse tax consequences. This is a measure the Roundtable has been requesting of the Treasury, DeBoer said. In fact, the proposed guidance has been on the IRS/Treasury business plan since August 2006 and several private sector groups have requested, without success, for it to be published. “The proposed guidance would enhance overall credit availability for commercial real estate by revising the effectively connected income rules under Section 864 pertaining to certain investment activities in the US by non-US persons,” he added.