Filed under: Deals, Raising money
The government of Qatar has begun investing in Credit Suisse (NYSE: CS) and the country’s prime minister states that Middle East country is prepared to put up to $15 billion into U.S. and European banks.
For the Swiss the deal might have some benefit. A report on Bloomberg states, “Credit Suisse in March 2006 became the first European bank to get a license for the Qatar Financial Centre, a self-regulated business park designed to attract lenders to the Gulf say as part of a plan to diversify the economy away from oil and gas.”
The statement from the Qatar government raises two questions, one which has been causing political friction for some time. Congress and some officials in the Bush administration have wondered in public whether it is good for foreign sovereign funds to own very huge pieces of the largest U.S. banks. The fear is that these entities could push their financial and political agendas through their equity stakes. The comments by the government are absurd. Troubled banks can either take sovereign money or face the threat of going under. No one in the Congress has recommended that the U.S. government put money into these banks, so where else will the capital to save these firms come from?
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