The FDIC's Proposed Statement of Policy on Qualifications for Failed Bank Acquisitions would impose significant burdens on bidders for failed banks that are backed by private-equity investors and would likely squelch the interest those funds have in injecting new capital into the banking system to fund acquisitions of failed banks. These burdens would both be inconsistent with the FDIC's mandate to resolve failed banks at "the least possible cost to the deposit insurance fund" and disregard the FDIC's positive experience with private-equity-backed bidders during the last banking crisis.

Four aspects of the proposed policy statement are especially problematic: the 15% Tier 1 leverage ratio requirement; the expanded source of strength doctrine; the requirement for cross guarantees when some or all of the investors in a holding company or bank that acquires a failed bank also hold a majority investment in one or more other FDIC-insured banks; and the three-year prohibition on selling or otherwise transferring securities of the investors' holding company or bank without prior FDIC approval.

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