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WASHINGTON — Squeezed by rising bank failures, regulators made it easier Wednesday for private investors to buy failed institutions.
The Federal Deposit Insurance Corp.’s board voted 4-1 to reduce the cash that private-equity funds must maintain in banks they acquire.
Private-equity funds tend to buy distressed companies, slash costs and then resell them a few years later. They have been criticized for excessive risk-taking. But the depth of the banking crisis has softened the FDIC’s resistance to them.
