BankWatch

The price that the largest U.S. banks pay to borrow money is set to skyrocket -- and that's just the beginning of the sector's growing problems, which could put a big crimp in their profits.

Private equity firms are ramping up their investments in weak banks, expecting big gains as the economy improves. By doing so, they are skirting around special FDIC rules designed to limit just how much of a stake they can own.

As struggling banks get acquired or fail, the U.S. Treasury is shouldering a growing burden: Its TARP investments have turned out to be a bust -- and there are signs of more trouble ahead.