FDIC May Ditch Public-Private Bad-Assets Plan

The government may scale back or put on hold parts of its controversial, slow-starting plan to get toxic assets off banks’ books, the Wall Street Journal reports. With both buyers and sellers expressing reluctance, and banks looking healthier, the Federal Deposit Insurance Corp will likely delay next month’s scheduled test-run of its part of the program to buy whole loans.

The Treasury, meanwhile, will go ahead with its securities-focused role in the Public Private Investment Program, but may scale back its size. “There are a couple of factors that are still at play,” FDIC chief Sheila Bair said yesterday. “Banks have been able to raise a lot of new capital … so the incentive to sell may be less.” (More PPIP stories.)