FDIC Finalizes Rules Governing Private-Capital Bank Acquisitions

The Federal Deposit Insurance Corp. (FDIC) board has adopted a final Statement of Policy on the Acquisition of Failed Insured Depository Institutions, which provides guidance to investors interested in acquiring or investing in the deposit liabilities of failed banks or thrifts about the standards they will be expected to meet in order to qualify to bid on a failed institution.

The agency says a large amount of the responses garnered by the private-equity buyout rules it proposed in July centered on capital requirements. Traditional financial institutions are required to maintain Tier 1 capital equivalent to 5% of their overall assets. The FDIC's proposal pegged 15% as an appropriate ratio. The final policy statement indicates a compromise: 10%.

‘The policy statement strikes a thoughtful balance to attract nontraditional investors in insured depository institutions, while maintaining the necessary safeguards to ensure that these investors approach banking in a way that is transparent, long-term and prudent," says Sheila Bair, FDIC chair.



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