US FDIC staff proposes private equity guidelines
WASHINGTON, July 2 (Reuters) - Private equity groups would have to meet strong capital requirements and pledge to maintain long-term investments before being allowed to buy failed banks, under proposals the staff of the Federal Deposit Insurance Corp presented on Thursday.
The FDIC board is expected to vote shortly on whether to propose the measures and put them out for public comment.
FDIC Chairman Sheila Bair has said she is comfortable with the private equity deals the agency has struck so far for failed banks such as IndyMac and BankUnited, but said there needed to be a more structured process.
Private equity groups would be required to maintain strong capital at the banks they invest in, specifically a Tier 1 leverage ratio of 15 percent, for three years. They would also have to maintain the investment in a bank for three years. (Reporting by Karey Wutkowski; Editing by Lisa Von Ahn)
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