While many small banks are nearly going underwater and having a hard time acquiring liquidity, on the other side of the spectrum, there are some entities raring to go after regional banks, whose assets are not clean: Private equities.
I see this in two ways.
First, this once again illustrates the importance of market mechanism. Without these movements taken from the private sector, troubled banks will have a hard to time to get out of this mess just solely depending on bailouts or expecting sudden recovery. Second, considering the very nature of banking industry, it is very prone to contagion risks. So, the chance is that when one bank is suffering, it is very likely that the other bank nearby is undergoing difficulty as well. That being said, the deals reported in the article implicitly indicate that many firms are sanguine about the future of these banks; this also implies their views about the possibility of recovery in the overall capital markets and credit markets.
But again, if we see the fundamental situation, maybe they are willing to take a little bit longer investment horizon for these investments.
