Private equity firms would love to gain leverage at top-tier Wall Street banks. But investing in financial services firms is a tricky business. The biggest issue in most cases boils down to regulation. We've noted that banks have long been averse to regulation-heavy industries. But the need for capital is so great in the financial services industry that some, including Breakingviews.com, are speculating that powerful Wall Street lobbies might try to change them. Private equity firms certainly do not want to be seen as bank holding companies, or anything that would entail heightened regulation. Breakingviews.com notes some industry-targeted funds are being raised. They may be able to register as bank holding companies.  

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