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Ninety-eight banks have failed so far this year as losses have mounted on commercial real estate and other soured loans amid the most severe financial climate in decades. The FDIC said last week that the failures have cost it about $25 billion. In September, the FDIC opened the door wider for private investors to buy failed financial institutions. The FDIC's board voted to reduce the cash that private equity funds must maintain in banks they acquire. Private-equity funds have been criticized as excessive risk-takers. But with fewer healthy banks willing to buy ailing institutions, the banking crisis has softened the FDIC's resistance to private buyers.
[Associated
Press]
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