see also: credit crisis of 2007  policy and regulation , Financial markets,  Commercial Banking

increased regulations of financial markets 2008 

 why? 

Policy and regulation are important to watch.  As they change, there will be opportunities for entrepreneurs. 

Balancing the need for regulations with innovation (and economic growth)

In a macro sense;  too much regulation, and we see a lack of competition, and a lack of Innovation.  But too little regulation, and we see scandals, crises...and later, a call for more regulation.  Think about the results of the credit crisis in the USA (2007), and the resulting calls for more regulations... is that a good thing?  Well, on one hand we can see that wrong things happened, and regulation should be put in place to make sure it doesn't happen again...but, on the other hand... if we look at any developing nation, and in country after country...we see that over regulations cuts off competition, and stymies investment, and with underinvestment comes under performing asset classes.  In each of these emerging markets, we see that "deregulations" is often the key to spurring innovation, competition and economic growth. Think about this before you call for more regulations (and learn these lessons before willingly committing your market to more regulations).

Innovation

Wherever you see policy and regulation, you will see innovation (to get around the regulation).  Commercial Banking is one the most creative sectors when it comes to developing products to get around regulation.  For example, there has been massive Innovation in the financial sector when it comes to the securitization of mortgages (which partly is to blame for the subprime lending crisis). 

effect on Private equity industry:

More threats for private equity: The Treasury Department's proposal for regulating the financial market poses more threats for private-equity firms. It calls for more involvement from the Federal Reserve, gives the central bank extra visibility into firms' investments and even gives the Fed the power to force buyout firms to address financial-stability problems. Chicago Tribune (04/01)  see more:  private equity trends

Change in rules for PE in Banking sector:

09/2008:   In response to the credit crisis, there has been a change in rules regulating Private equity in the banking sector.  The fed loosened the rules.  It was 25% if a private equity firm wanted to buy into a bank, that was the limit.  If you owned more than 25%, you were essentially regulated like a bank.  But, they changed the rules to 35% in an effort to bring the PE "smart-money" in from the sidelines, and to have the wealth of PE funds help get the US banking sector through this crisis.