PE Investors Ready to Bid on Banks

In the week after the Federal Deposit Insurance Corp. eased its stringent private-equity proposal, firms appear wary but ready to bid on failed banks again. Observers said even though the final guidelines are more palatable, they are restrictive enough that private-equity bidders still face tougher standards than competitors and investors must carefully determine if a bid's reward justifies the regulatory cost. "It's at least encouraged me enough to where we will try" to bid, said Wilbur Ross, the chairman and chief executive of WL Ross & Co. LLC. Ross has also been a bottom fisher of troubled mortgage assets, buying large residential servicing portfolios from such bankrupt non-prime lenders as Option One Mortgage, Irvine, and American Home of Melville, N.Y.