Officials from at least 15 U.S. states discussed Friday with FDIC chairwoman Sheila Bair the possibility of using their pension funds to buy troubled loans and securities – so-called “toxic assets,” the Bergen County Record in New Jersey reported.
The states are interested in investing in the federal toxic asset plan, believing it could provide a good return on investment, Orin Kramer, chairman of the New Jersey State Investment Council, told the BC Record. “Bair is open to the idea, but the details need to be worked out”, Kramer said.
The program, unveiled by the U.S. Treasury on Mar. 23, would provide federal funding to form public-private partnerships that would buy up so called “legacy assets,” including commercial and residential mortgages and securities. The intent is to reduce the bad assets on the balance sheets of banks, and free them to lend more, the paper said.
Present at the meeting were pension officials from New York City, New York State and Connecticut. Other states included Pennsylvania, California and Florida.
Pension funds have been battered in recent months by the general problems in the financial markets.