FDIC Mulls Loss-Sharing With Nonbanks to Boost Bids on Failures
- Banks have only scored these agreements during recent upheaval
- Loss-share agreements could benefit private equity firms
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The Federal Deposit Insurance Corp. is considering whether to offer loss-sharing agreements to private equity firms and other nonbanks that acquire parts of failed lenders, after the regulator was left holding a large portfolio of Signature Bank loans following its collapse.
The move, described by FDIC officials, could entice such firms to buy loans and assets from collapsed institutions if interest-rate hikes topple more regional lenders. Potentially, the FDIC could get higher bids from a wider range of firms by offering to share the risks involved with buying such assets.