The private-equity industry is getting support from a group of large state pension funds in its opposition to regulators' rules for acquiring troubled banks. Funds from Oregon, New York and New Jersey warned that the proposals could have a "chilling effect" on efforts to bolster the banking system. The rules would require private-equity groups to maintain the Tier 1 capital ratio of the bank they acquired at 15% of its assets, which is three times the level other banks are required to keep.

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