BRUSSELS, Belgium— The FDIC will begin allowing private-equity firms and other nonbanks to bid on failed banks, a major policy shift intended to make future resolutions faster and less costly, Acting Chairman Travis Hill announced.
Speaking at the Single Resolution Mechanism’s 10th Anniversary Conference in Brussels, Hill said the FDIC is working to expand bidder eligibility and modernize its failed-bank marketing process following lessons from the 2023 collapses of Silicon Valley Bank, Signature Bank, and First Republic.
Hill said the FDIC has developed a seller-financing program designed to include private-equity bidders and other nonbank entities in the resolution process—an effort he said would increase competition and reduce costs to the Deposit Insurance Fund. “Nonbanks control substantial pools of capital that can be deployed to bid on assets of failed institutions and can be used in partnership with banks to bid on entire institutions,” he explained.
As part of the change, the agency will roll out a pre-qualification process to vet and approve nonbank bidders before a bank failure occurs. The pilot, which will begin in January 2026, will include firms that participated in past failed-bank auctions such as Republic First Bank and Signature Bank. The FDIC expects to publish the full qualification framework after reviewing feedback from the pilot.
Hill emphasized that broadening bidder eligibility reflects a pragmatic response to modern banking risks and the speed of recent bank runs. With large institutions failing faster and with less warning, he said, “advance preparation during peacetime and clear, consistent communication” with potential acquirers are essential to preserve value and limit losses.