Wall Street is abuzz over whether the Federal Deposit Insurance Corporation will encourage pension funds to invest in failed banks. The FDIC needs the money, but the potential collapse of the commercial real-estate loans could pose a danger to pension funds, and the retirement security of their clients.

Seeking new sources of capital is nothing new for the agency. In 2009 the FDIC loosened its restrictions on private equity funds that invest in banks, lowering the capital requirement to 10% from 15%. At the same time the FDIC stipulated that these funds would have to maintain their investments for at least three years, in order to keep them from flipping.

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