Bloomberg reported on the huge public subsidy given by the FDIC to private equity underwriters (PEU's) on BankUnited.
It (FDIC) would reimburse BankUnited for 80 percent of the first $4 billion in losses and 95 percent of all additional losses. The FDIC also provided $2.2 billion in cash. By selling to Kanas’s group, the FDIC expected to lose $4.9 billion on the bank—which was still $1.5 billion less than it estimated it would spend if it had to liquidate it. The agency says its losses have grown to $5.9 billion.What's an extra $1 billion in subsidy for The Carlyle Group and company? The Carlyle Group, Blackstone and Wilbur Ross put up $900 million in new capital vs. $5.9 billion in FDIC funds. PEU owners took the bank public the next year.
