In a semi-ironic twist of fate, analysts are speculating that the Federal Deposit Insurance Corp.'s problems pawning off Alliance Funding's subprime platform/portfolio is partially attributable to the new dollar-for-dollar residual capital requirements the FDIC itself championed.

In essence, no banking entity wants to buy the portfolio because of capital charges it would incur, especially if the acquirer were to securitize the loans and generate residuals, which require dollar for dollar capital.

According to American Banker, a sister publication of ASR, the failure of Superior Bank could be significantly more costly to the FDIC than it had appeared late in 2001, when former bank owners, the Pritzker Family, flowed the FDIC a nice chunk of change ($460 million) to help with the losses.

One of the challenges the FDIC faced when it was trying to sell the Alliance unit as a whole was that the market had been saturated with portfolios last year, as banks such as Bank of America and Citigroup pared down or exited their subprime businesses.

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