In order to buy a failed banking institution, an equity fund will have to meet new criteria under newly proposed rules.   Several people involved with the proposal have argued that these rules need to be scaled back in order to avoid “scaring off money” which would otherwise be available to save a failed institution. 

“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 needed to be a more structured process.

Private equity firms have been increasingly active in the banking sector. Firms including WL Ross & Co, Carlyle Group CYL.UL, Blackstone Group LP (BX.N) and Centerbridge Partners recently agreed to put up $900 million of capital to rescue troubled Florida lender BankUnited.”

Here is a link to an article on this topic: http://www.reuters.com/article/ousiv/idUSTRE56147220090702

Michael