Wal-Mart and Alliance Deals May Go Through

Implications: The 18 month moratorium on approvals of commercial firms acquiring industrial banks will not be extended past January.  The FDIC may not have the legal ability to block the acquisition of banks by Wal-Mart and Blackstone (Alliance).  This could open the flood gates for other deals as well.

Analysis: For 18 months the FDIC has refused to process applications by commercial companies to acquire industrial banks.  Today, the FDIC Chairman announced that this "moratorium" will end on January 31, 2008.  Unless Congress intervenes before then, the FDIC will have to start issuing decisions by early Spring.  Immediate benefits will flow to Blackstone, in that its acquisition of Alliance will be able to be approved, and to Wal-Mart which is seeding to acquire an industrial bank.  Other acquisition will follow after that.