As expected, the FDIC confirmed today that it is delaying the initial test of one of its toxic asset programs.The successful bank capital raises and renewed investor confidence in the banking system have provided FDIC Chairman Sheila Bair with enough evidence that the Legacy Loan Program can be placed in a holding pattern for now.
As a consequence, banks and their supervisors will take additional time to assess the magnitude and timing of troubled assets sales as part of our larger efforts to strengthen the banking sector
Banks were able to take advantage of the nearly vertical movement in the equity markets and opportunistically raise capital by equity and debt offerings, thereby avoiding having to sell toxic assets at distressed prices.
U.S. FDIC delays pilot sale of toxic bank loans [Reuters]
