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Financials

RPT-FDIC prodding pension funds to invest in failed banks-B'berg

(Repeats to remove unrelated story inadvertently attached)

March 8 (Reuters) - U.S. regulators are encouraging public pension funds that control more than $2 trillion to inject capital directly into the banking system by buying failed lenders, Bloomberg said, citing people briefed on the matter.

The Federal Deposit Insurance Corp (FDIC) is trying to attract pension funds that want to buy stakes or assets of distressed bank holding companies, Bloomberg said.

Direct investments may allow public retirement funds to reduce fees for private equity managers and FDIC to get better prices for distressed assets, according to the report on the website.

FDIC was not immediately reachable for a comment outside regular U.S. business hours. (Reporting by Amulya Nagaraj in Bangalore; Editing by Lincoln Feast)

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