What banking union looks like
Few people probably realize that the Federal Deposit Insurance Corporation, which insures bank deposits in the 50 states, also insures billions of deposits in Puerto Rico. So if a bank in Puerto Rico goes under, customers are protected.
At least three of Puerto Rico’s banks — Eurobank, R-G Premier Bank and Westernbank — are operating under cease-and-desist orders from regulators, restricting their ability to make new loans. They had been given until March 31 to raise new capital or combine with healthier banks.
Now that the deadline has come and gone, regulators have been working on a confidential plan to auction off the lenders, according to several people involved in the situation. It is known as Project Themis, after the Greek goddess of divine law and order.
Regulators are hoping to strengthen the territory’s banking system by forcing its consolidation, while also weaning lenders from the high-cost deposits they obtain from the mainland to make loans, these people said.
Even as the government ends other support programs, they said, the agency is expected to make temporary financing available to the acquirers to help replace those more expensive deposits. Bids were due this week, they added.
We’ll see if the Eurozone ever gets there.
That is from a 2010 report, here is a more recent update.