FDIC may seize 'critically undercapitalized' Chicago-based lender
By Becky Yerak | Tribune reporter
August 2, 2009
On July 2 the FDIC proposed requiring that private firms investing in a failed bank maintain a Tier 1 leverage ratio, or capital as a percentage of average total assets, of 15 percent for three years. Currently a bank is considered well-capitalized if it has a 5 percent leverage ratio.
The private-equity industry immediately cried foul, saying the proposed guidance would deter future private investments in capital-starved banks. The FDIC comment period expires Aug. 10 but has already had an impact.
"We've been looking at a lot of banks, but if anything our appetite is less because we were hoping regulations would get lightened, not tightened," said a Chicago business attorney.
