FDIC nudges private equity firms to take back seat (Dealscape

The message from bank regulators to the private equity industry: We want your money but as for you -- not so much. On Thursday, the board of the Federal Deposit Insurance Corp. approved new rules allowing private equity investors to acquire failed banks. The rules establish higher capital requirements and sale restrictions than those faced by existing bank owners with whom they will be competing to acquire depository institutions and create potential for additional financial commitments.

Private investors can avoid the extra obligations, however, if they partner with bank holding companies to recapitalize and operate banks acquired from FDIC receivership. The catch: the bank holding company must be acquiring at least 50% of the target bank's stock, requiring the PE investors to live under the dictates of a controlling investor.

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NOT A SUBSCRIBER? FDIC nudges private equity firms to take back seat Posted on August 27, 2009 5:30 PM The message from bank regulators to the private equity industry: We want your money but as for you -- not so much. On Thursday, the board of the Federal Deposit Insurance Corp. approved new rules allowing private equity investors to acquire failed banks. The rules establish higher capital requirements and sale restrictions than those faced by existing bank owners with whom they will be competing to acquire depository institutions and create potential for additional financial commitments. Private investors can avoid the extra obligations, however, if they partner with bank holding companies to recapitalize and operate banks acquired from FDIC receivership. The catch: the bank holding company must be acquiring at least 50% of the target bank's stock, requiring the PE investors to live under the dictates of a controlling investor. This is a free content preview. Subscribers enjoy access to all stories in full as well as second-to-none market intelligence. Dig deeper, with Pipeline. 198 in-depth reports of M&A deals in Regulation 172 in-depth transaction records for Goodwin Procter LLP 99 articles related to Sheila Bair 81 in-depth transaction records for the Federal Deposit Insurance Corp. 10 years of news and analysis archives from the voice of The Deal Economy Most searched keywords Deutsche Bank Birds Eye Cadbury AG Agrium Inc. Skadden Arps Revolution Money Tandberg ASA Aisling Capital Ken Lewis Natco		EXISTING USERS Username Password Forget your password? Missing a product?

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