Investors including private-equity firms may find it easier to acquire U.S. banks after the Federal Deposit Insurance Corp. said it will let groups without charters bid for the deposits and assets of failing lenders.

The FDIC change, announced in a press release today, will help ensure “failing institutions are resolved in a manner that will result in the least cost to the Deposit Insurance Fund” by marketing assets to “known, qualified and interested bidders.”

“This may indicate that the FDIC is experiencing difficulties in finding local and traditional buyers of failed banks,” the report said.

We knew this was coming (it has been well telegraphed) but the idea of letting hedge funds anywhere near consumer deposits is breathtakingly stupid. 

We are rabid anti-regulation types. However, banking has to be an exception to laissez faire as banking is by definition a confidence game to start with (emphasis on “con” in confidence). If we lend out money we don’t have as individuals we got to jail. If we buy a bank it is business as usual. Now a completely unregulated industry can buy access to Mom and Pop savings.