Clip File: FDIC Offers Billions In Guarantees For Buyers Of Failed Banks

Here's a must-read from today's HuffPost:

As the Wall Street Journal reports this morning, in what are called a "loss-share" agreements, buyers of failed banks are getting billions of dollars in government guarantees to snatch up the bank's bad assets. To entice buyers, the Federal Deposit Insurance Corporation is offering to cover around 80 percent of the losses associated with buying a bank. The result, the WSJ points out, is a massive subsidy to the private equity industry, and a huge risk to the American taxpayer.

The rest of the story: "Loss-Share": FDIC Offers Billions In Guarantees For Buyers Of Failed Banks (Huffington Post 2009-08-31)