WASHINGTON – The FDIC, saddled with soaring losses on failed banks, approved rules yesterday to make it easier for private-equity firms to buy failed banks.
New rules approved by the banking regulator will require private-equity firms with no history of bank management to maintain a 10% capital-asset ratio and to submit to strong restrictions on lending to their affiliates. The rules also require private-equity firms that bid on banks to commit to owning and operating them for three years.
The new rules are not as stringent as those proposed last month that would have required a 15% capital commitment which caused several private equity funds to balk at recent purchases.
New banks are required to have an 8% capital commitment.
The new rules comes as the number of failed banks has grown to 81 so far this year, with the FDIC stuck with billions of losses on those failures.
FDIC Chairman Sheila Bair said the new rules would expand the pool of capital bidding on failed banks.
