The Federal Reserve Board is considering steps to make it easier for private-equity firms and others to invest in banks, according to regulators and other people familiar with the matter.

The central bank is also expected to offer more clarity about what outside investors can and cannot do when they want to acquire sizable stakes in financial institutions but avoid direct regulatory supervision.

"We are looking at ways we can make those things more workable and gain from the experience we've had over the past few years," Federal Reserve general counsel Scott Alvarez said.

The expected changes could relieve some of the pressure on lenders that are having difficulty lining up new capital from investors, experts said.

Until now federal rules have often served as an obstacle that prevented private-equity firms from pumping much cash into struggling lenders. The Fed and other banking regulators are wary of unregulated entities exerting control over banks. The result is that, except for a few recent exceptions, buyout firms have steered clear of bank investments.

Instead, banks have drummed up cash from a combination of government investment funds, mutual funds, and other investors, often through public offerings of stock or other securities. But there are signs that the capital pool is starting to dry up at a time when many financial institutions are still hurting.

Fed officials recently have met with big buyout firms — including J.C. Flowers & Co., Carlyle Group, Kohlberg Kravis Roberts & Co., and Warburg Pincus — and banking lawyers to discuss the obstacles, according to people familiar with the matter. Among other things, the Fed has been trying to determine if private-equity firms are seeking more board representation than is currently permitted in bank deals, one person said.

The Fed is not expected to take a completely hands-off approach that some private-equity firms might prefer. Still, even tangential changes could be significant, potentially opening the door to an influx of private-equity capital, industry experts say.

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