As it becomes more and more clear that many U.S. banks are doomed to fail later this year, an unknown investment management firm has been recently granted clearance by the FDIC to buy up a number of these soon-to-fail institutions.
The Financial Times reported on March 13th Porticoes Capital has been granted the ability to purchase some of these failed banks, per a regulatory filing.
‘Porticoes is like a special purpose acquisition company (SPAC) in that it would need to acquire another company before going into business,’ Pymnts reported. ‘But it differs from a SPAC in that the amount it raises from investors will depend on the size of the bank it acquires. The report also postulates that Porticoes’ plan to target failed banks suggests it anticipates more trouble for the industry after last year’s regional banking crisis, kicked off by the collapse of Silicon Valley Bank (SVB).’
I’m an advocate for the shelf charter. In the failure of SVB, numerous potential bidders were excluded from the process, and as a result the cost to the FDIC deposit insurance fund might not have been minimized.
Brian Brooks, partner at law firm O’Melveny & Myers and a former acting comptroller of the currency, told the FT.
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