Article: United States : FDIC Seeks Limits On Private Equity Cos' Failed Bank Buys.

Byline: babalu03

Private equity investors seeking to buy the growing number of failed banks would be limited from lending to their investors and investment funds, and would have to make sure the new bank remains sufficiently capitalized under a new proposal from U.S. regulators.

The Federal Deposit Insurance Corp.'s board of directors on Thursday voted to seek comment on a proposal that would set new limits on allowing private equity firms to purchase failed banks. The staff proposal calls for investors to maintain certain capital levels at the acquired bank - a minimum 15% Tier 1 leverage ratio for at least three years - and would put other restrictions ...

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