Private equity firms that want to buy troubled banks will be prevented from flipping their investment for at least three years under proposals revealed today by America's $49 billion deposit guarantor.

The Federal Deposit Insurance Corporation's (FDIC) board outlined for the first time terms under which private equity firms would be permitted to buy struggling US banks.

As well as the three-year minimum ownership rule, buyers must meet stringent capital requirements and will not be permitted to make a purchase through an offshore vehicle.

Buyers of multiple banks will also have to offer a cross-guarantee, using the assets from one bank to prop up another bank in the group should it struggle.

In a memo to the corporation's board, Sandra Thompson, director of the FDIC's supervision and consumer protection division, and Michael Bradfield, the corporation's general counsel, said: "The FDIC is particularly concerned that owners of banks and thrifts ... have the experience, competence and willingness to run the bank in a prudent manner and accept the responsibility to support their banks when they face difficulties".

The FDIC, which protects America's $8.9 trillion bank deposits from being lost in bank collapses, was responding to increased interest from private equity firms about buying banks.

Firms have amassed huge buy-out funds, with $76.2 billion raised in the second quarter alone, according to Prequin, the alternative asset data provider, but have been prevented from doing the highly-leveraged deals they prefer because banks are not keen to offer large loans for buyouts.

Private equity firms are interested in buying troubled banks because the FDIC will sometimes offer a stop-loss on loans that protect the buyer from bad debts.

About 70 banks have gone bust in the US since January 2008, putting strain on the FDIC and fuelling its interest in offloading some of its obligations to collapsed banks.

But the FDIC's recent attempts to sell banks to private equity firms have not been completely successful. Last month the corporation wound down Atlanta's Silverton Bank after a consortium including Carlyle, the world's biggest private equity group, did not submit a big enough offer for the bank.

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