Funds News

US FDIC to meet July 2 on private investor guidance

WASHINGTON, June 26 (Reuters) - U.S. regulators will discuss on Thursday guidelines for how private equity firms can buy assets from troubled banks.

The Federal Deposit Insurance Corp will hold a board meeting to discuss its “Policy on Investment in, or Acquisition of, Failing Insured Depository Institutions,” according to a meeting agenda posted on Friday.

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 needs to be a more structured process.

“We’re going to be working on some generic guidance to help provide clarity about ... nontraditional acquirers of banks such as private equity, their appropriate role and how their bidding process needs to be structured,” Bair said last month.

“And the ownership structure needs to be maintained to make sure they will be a source of strength for the bank.”

Her comments were made after firms including WL Ross & Co, Carlyle Group [CYL.UL], Blackstone Group BX.N and Centerbridge Partners agreed to put up $900 million of capital to rescue BankUnited FSB, a troubled Florida lender.

When a bank gets into significant trouble, the FDIC and its primary regulator help structure a recovery process. If that fails, the FDIC tries to find a buyer through a competitive bidding process in an attempt to minimize the cost to the federal deposit insurance fund.

Traditionally, the FDIC has looked to other banks to absorb much of the failed institution. But the agency is increasingly looking to other types of investors as the number of failed banks continues to climb.

So far this year, 40 banks have failed, compared to 25 in 2008, and only three in 2007. (Reporting by Karey Wutkowski; Editing Bernard Orr)