Regulators ARE NOT Making It Easier for PE Firms To Own Banks
Did you read your New York Times yet this morning? If so, you might have seen a B1 story about next week’s FDIC vote on rules governing private equity investment in banks. It begins: “Faced with a growing wave of bank failures, the Federal Deposit Insurance Corporation is taking extraordinary steps to attract buyers for troubled institutions to keep the fund that makes depositors whole from being drained. Federal regulators are planning next week to make it easier for private equity firms to buy insolvent lenders, according to people briefed on the situation, a move that would reduce the number of failed banks that the fund would have to support…” Wow. The FDIC must have done a massive turnaround. Last I checked, it had proposed all sorts of rules to make it tougher for PE firms to invest in banks. Now it’s apparently scrapped all that, and thrown in a few tasty carrots for good measure… But there’s one giant caveat: The NY Times reporter doesn’t have a clue what he’s talking about (neither, apparently, do his editors).
