Sunday, July 11, 2010

FDIC Loss Sharing YouTube Explainer

"Loss Sharing" is a public/private partnership between the FDIC and a healthy bank where the FDIC covers an amount of the losses incurred by a bank acquiring failed bank assets in exchange for possible upside to be shared with the FDIC that might result from the acquiring bank's expert asset management and improved economic conditions.

Through May 2010 the FDIC has entered into 161 loss sharing agreements with $173.5 billion in assets under loss sharing since the structured vehicle was reintroduced in 2009. The bulk of failed bank assets are being placed into these ventures.