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Weird ice cream flavors have in recent years spread like mad and now include such inviting types as raw horseflesh or sardines and brandy. Is something similar happening in the world of ETFs, or Exchange Traded Funds? Mario Draghi, chairman of the Financial Stability Board, hinted as much last week. On Monday, the FSB delivered a more detailed report on the matter, noting that these once “plain vanilla” investment products have taken a “disquieting” turn and have tacked on “new elements of complexity and opacity.” The new flavors of ETFs pose new challenges regarding counterparty and collateral risks and could...

Doubts mount over US toxic asset plan By Krishna Guha and Edward Luce in Washington and Saskia Scholtes in New York Published: June 7 2009 22:24 | Last updated: June 7 2009 22:24 The controversial US toxic asset clean-up plan, aimed at clearing bad loans from US banks’ books to enable them to raise capital and lend freely, has fallen behind schedule, and may never be fully implemented. The plan has fallen prey to concerns from potential investors and regulators and waning interest from the banks themselves. Investors fear that Congress may set caps on pay while regulators are beginning...

Toxic Assets. Over the past year, our government has spent trillions to relieve the economy of their burden. We’ve been told time and time again that by giving $20,000,000,000 in TARP funds to Bank of America, for example, the feds were going to “fix” the mortgage crisis, and the “toxic loans” that it entails. But bailouts, like the $150,000,000,000 given to AIG, have done nothing to revive economic growth. Bailing out banks and lending institutions have not made life easier for anyone. AIG still lost $4,400,000,000 last quarter. Bear Sterns still had to merge with JP Morgan Chase out of...

The Fed: Our Next Troubled Bank? By: Money and Markets Friday, April 24, 2009 11:46 AM by Mike Larson The Federal Reserve is watching the backs of U.S. banks. But sometimes I wonder, “Who’s watching the Fed’s back? Is the Fed our next troubled bank?” You see, all of this garbage paper that’s going bad — the troubled residential mortgage backed securities (RMBS), the commercial mortgage backed securities (CMBS), the asset backed securities (ABS), the Fannie Mae bonds, the corporate loans, and so on — hasn’t just gone “Poof.” Instead, more and more of it has been landing on the...

FDIC seeks pension funds' interest in toxic-loan purchases 11:39 AM, April 3, 2009 Major pension funds today are getting pitched to participate in the Obama administration's plan to buy banks' toxic mortgage assets. Federal Deposit Insurance Corp. Chairman Sheila Bair was scheduled to brief the funds, including the California Public Employees’ Retirement System, on the program. The California State Teachers Retirement System also was invited. A CalPERS spokeswoman said one of the questions the fund had was whether it could buy loans directly from banks under the program, rather than using a money manager to handle and manage the purchases....

The New York Times offers the following on the Obama Administration's toxic asset relief plan: WASHINGTON — The Treasury Department is expected to unveil early next week its long-delayed plan to buy as much as $1 trillion in troubled mortgages and related assets from financial institutions, according to people close to the talks. The plan is likely to offer generous subsidies, in the form of low-interest loans, to coax investors to form partnerships with the government to buy toxic assets from banks. To help protect taxpayers, who would pay for the bulk of the purchases, the plan calls for auctioning...

US banks face big writedowns in toxic asset plan By Francesco Guerrera in New York and Krishna Guha in Washington Published: March 24 2009 23:31 | Last updated: March 24 2009 23:31 The government’s toxic assets plan will force banks such as Citigroup, Bank of America and Wells Fargo to take large writedowns on their loans, requiring them to raise more capital from taxpayers or investors, executives and analysts have warned. Senior bankers say the authorities’ latest drive, announced on Monday, to cleanse financial groups’ balance sheets by encouraging investors to buy troubled residential and commercial mortgages will prompt banks...

<p>Treasury Secretary Timothy Geithner is reportedly putting the finishing touches on a plan to get toxic assets off the books of the country's struggling banks.</p> <p>Administration and industry officials say the plan could be announced as soon as Monday.</p> <p>The sources say Geithner's proposal will employ the resources of the Federal Reserve and the FDIC to make the government's $700 billion financial rescue fund go further.</p>

HORSHAM, England (Reuters) – The Treasury will offer more details in the coming week about how proposed public-private partnerships to take bad assets off banks' books will work, a senior department official said on Saturday. The proposal for such partnerships was first made by Treasury Secretary Timothy Geithner in February but the lack of detail about them at the time disappointed financial markets led to a sharp drop in stock prices. Many analysts say the problem of toxic assets -- particularly mortgages gone bad as a result of the U.S. housing bust -- is at the heart of banks' reluctance...