Will FDIC Open The Door To Private Equity?

In news that could herald a sea change in the role that private equity (PE) firms will be able to play in the ongoing recapitalisation of the US banking sector, May 21 saw US regulators sell the banking operations of recently-closed Florida lender BankUnited Financial to a private equity consortium led by John Kanas, the former head of North Fork Bank. Florida's largest lender, BankUnited had US$8.6bn of deposits as of March 31 and assets of US$12.8bn as of May 2, and as such it represents the largest bank to faill since California-based Downey Savings & Loan was closed in November with US12.8bn billion in assets. Bank failures have accelerated in 2009 to a 15-year high, with 34 bank seizures in the year to date compared to 25 in 2008 and 3 in 2007.

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