I can only imagine how much worse it's going to be for banks when they ultimately have to deal with the toxic cesspool of bad assets they have on their books, but haven't yet been forced to deal with, and for which the government is losing the will and ability to help purge them of... http://www.google.com/hostednews/ap/article/ALeqM5jyAY3iB7Uhmh9O4qGEU4TKNlA78wD9AAB7AO4 "...The FDIC board, meeting in a public session Wednesday, is expected to ease restrictions proposed for private equity firms early last month, people familiar with the issue say. They spoke on condition of anonymity because the rules haven't been made public in final form yet. The move would follow the stream of recent developments. In July, when bondholders rescued commercial lender CIT Group Inc., it marked the first time since the crisis erupted last fall that private investors had saved a big financial firm without federal aid or oversight. Rising loan defaults, fed by tumbling home prices and worsening unemployment, have hammered banks. Eighty-one have failed so far this year. The closings have drained billions from the FDIC deposit insurance fund, which insures regular bank accounts up to $250,000 and is financed with fees paid by U.S. banks. The FDIC estimates bank failures will cost the fund around $70 billion through 2013. The fund stood at $13 billion â its lowest level since 1993 â at the end of March. It's slipped to 0.27 percent of insured deposits, below a congressionally mandated minimum of 1.15 percent. The FDIC seizes failed banks and seeks buyers for their branches, deposits and soured loans. Under the crush of failures, the agency says private equity can inject vitally needed capital into the system, especially with fewer healthy banks looking to acquire failed institutions. "There's an enormous need for private money to do this," said Josh Lerner, a professor of finance at Harvard Business School. "There's the sense that you have a lot of money which is currently sitting on the sidelines."