The flood of money into private equity caused more competition in the world of buy-outs, with the result that deals were done at higher valuations.
Firms might rush to list their shares and issue new equity, causing the overall stockmarket to fall in the face of the extra supply of shares.Taxing interest would hurt bits of Main Street, too.
CBOE Volatility Index (VIX): Just when you thought it couldn't get any worse, a wave of selling pressure hit global equities caused by further reports of economic weakness and the deepest contraction in New York area manufacturing activity on record.
"Abusive loans that strip borrowers' equity or cause them to lose their homes should not be tolerated," Mr. Kroszner said.
The revision, it said, was mainly the result of write-down of equity securities caused by a drop in stock prices.
In September, Citigroup had a spike in late payments on consumer mortgages and home equity loans, causing the bank to set aside more money to cover expected losses.
But it does need to be distinct, so that regulators can force it to be converted into equity without causing the firm to default.
Even so, worries about bad loans and a slump in the value of its equity holdings caused Standard & Poor's to cut the German bank's credit rating (as well as those of HypoVereinsbank and Dresdner).
However if a company has a lot of its debt on its balance-sheet, it is highly sensitive to a small adverse change in market conditions since these can wipe out the value of its equity and cause it to go bust.
His big speech on QE, back in January 2009, did not mention share prices at all.If it is vital to maintain stockmarket confidence, then equity jitters whether caused by Japanese earthquakes, European fiscal problems or something else are a reason to keep QE going.
