Dear FDIC, It's Been Six Months... How About Those Bank Deals?
In August, the FDIC passed a stringent set of rules aimed at making it easier for buyout firms to take control of banks. The end result, however, was so restrictive that many private equity firms basically abandoned the idea altogether. Notably, FDIC chief Sheila Bair promised to review the policy six months down the road. The PEC has called the policy counterproductive, unnecessary, and a deterrent to deal-doing. Representatives of Blackstone Group, Carlyle Group and Centerbridge Partners said the policy "retains several requirements that may make it less likely that private investors will participate in acquisitions of failed depository institutions, or that will cause them to submit lower bids than they otherwise would have submitted." And they were both right. Since then, zero bank buyouts have occurred, according to Thomson Reuters.
