A New York hedge fund investor who had assisted in the deal for failed IndyMac Bank is claiming that proposed restrictions on private-equity investments could hurt the thrift's chances to grow.
John Paulson, the president of Paulson & Co. Inc., told the Federal Deposit Insurance Corp. that the guidelines on investor acquisitions of failed banks would put firms at a competitive disadvantage, could make nonbank investments look more attractive, and may defeat the goal of attracting more capital to the industry.
"Although [Paulson & Co.] wants to invest more in failed banks, as the complexity, capital requirements, risks and limitations of such transactions increase we have to consider other potential investments," he said Friday in a letter to FDIC Chairman Sheila Bair.
The agency released the letter Monday.
He said IndyMac, which a team of investors including Paulson bought from the FDIC in March and renamed OneWest Bank, would be hindered under the rules in its plan to buy other institutions. Under the proposal, failed banks purchased by private-equity investors would have to maintain a 15% Tier 1 leverage ratio, which is much larger than the minimum required for other acquirers.
