Banks avoiding risky deals to escape DC scrutiny

Increased pressure from financial regulators is discouraging some banks from taking on risky, but profitable, deals.

The Wall Street Journal reported Thursday that new scrutiny over whether banks are taking on deals overloaded with debt has led some banks to avoid certain corporate takeovers.

Regulators are increasingly bringing pressure on banks to avoid deals they see as too risky, as they ramp up efforts to avoid conditions that led to the last financial crisis. However, that means that deals for private equity firms, which often rely on bank support to finance takeovers, are getting costlier.