Casey Mulligan with a terrific post called "The Imperfect Information Excuse":
"A more coherent story for the lack of equity sales is that the cost of capital is too high (many investors do not want to own bank stock regardless of what a detailed audit would show) and, even if it weren't, subsidized public capital is on the horizon and raising private equity would make them less eligible for the subsidy."
Here's my comment:
"and, even if it weren't, subsidized public capital is on the horizon and raising private equity would make them less eligible for the subsidy."
Bingo! Especially if capital is too high.
Don the libertarian Democrat
October 16, 2008 11:08 AM