When a U.S. bank fails, it is up to the FDIC to ensure the stability of the failed bank's assets and deposits so that customers won't lose out when their bank of choice goes under.
To do this, the FDIC can either arrange for the sale of the failed bank's assets to an existing financial institution or directly pay out the failed bank's deposits, as long as they fall within the FDIC's insurance limits. The former "Purchase and Assumption Method" is most commonly used, but requires the FDIC to find a willing buyer, and often must sell assets at a discount, which may potentially cause billions in losses to the FDIC fund.
Some institutions are repeatedly tapped by the FDIC to buy up assets of failed banks, which can be an attractive situation as the purchasing bank does not necessarily have to buy all of the failed bank's assets and can see their deposits under management increase literally overnight. The rest of the assets are eventually auctioned off by the FDIC.
So, which institutions have bought the most* failed U.S. banks? Click ahead to find out!
By Paul Toscano
Posted 23 Oct 2009
Updated 3 Nov 2009
*Institutions buying the same number of banks are ranked by the size of assets belonging to the failed bank. This number is not necessarily the amount assumed by the purchasing bank.