Skip to main content

The Capitalist Conflict

  • Author:
  • Updated:

That the United States would be more than fleetingly conflicted about the role of capitalism in saving capitalism might be surprising- in any other age. Today, we can only shake our heads watching the government publicly disembowel the "money men" before, nearly in the same breath, pleading with them to jump in and fulfill their traditional purpose: salvaging sinking institutions.

With bank failures at a 15-year high, private equity firms have been clamoring to buy the ailing institutions recently, but have run up against regulatory restrictions and public criticism.
But the F.D.I.C., which is expected to face further bank failures in the coming months, indicated that it might soon release policy guidelines for potential private equity investors seeking to buy failed banks.
"Due to the interest of private-equity firms in the purchase of depository institutions in receivership, the FDIC has been evaluating the appropriate terms for such investments," the agency said Thursday. It added it would be giving guidance on eligibility and other conditions for private-equity investors in the near future.

Hypocrisy aside, we understand the urge to regulate... well... everything. But why look a cash-cow in the mouth? After the failure of BankUnited it is hard for us to imagine any roadblocks that make sense to erect. All we need now is for KKR to insist this "isn't the business we are in," right before closing deals on five failed banks.
F.D.I.C. to Issue Guidelines for P.E. Firms on Bank Deals [Dealbook]