09/21/2009 05:12 am ET Updated May 25, 2011

Cash-Strapped FDIC Turns To Private Equity Firms To Buy Struggling Banks

Faced with a growing wave of bank failures, the Federal Deposit Insurance Corporation is taking extraordinary steps to attract buyers for troubled institutions to keep the fund that makes depositors whole from being drained.

Federal regulators are planning next week to make it easier for private equity firms to buy insolvent lenders, according to people briefed on the situation, a move that would reduce the number of failed banks that the fund would have to support.