Many banks are raising capital these days; the latest to hit the headlines are Washington Mutual, raising $7 billion from TPG, and National City, which is getting something north of $7 billion from a syndicate led by Corsair Capital. Such bilateral deals seem to be more common than the alternative route, taken by Wachovia, of going to the public markets.

Why would banks choose to limit themselves to a small number of sovereign wealth funds or private-equity shops, rather than the millions of potential investors in the stock and bond markets? After all, it's not as though the big investors can't subscribe to a public offering if they're so inclined.

Roger Ehrenberg has a theory on this: that the big funds are jumping in too early, desperate to justify their existence.