NEW YORK, May 27 (Reuters) - A U.S. government plan to rid
banks of bad loans is stalling and may soon be put on hold, the
Wall Street Journal reported on Wednesday, citing people
familiar with the matter.
The Legacy Loans Program, which is being crafted by the
Federal Deposit Insurance Corp, is part of the $1 trillion
Public Private Investment Program the government announced in
March to encourage banks to sell securities and loans weighing
on their balance sheets to willing investors.
Prospective buyers and sellers have expressed reluctance to
the FDIC about participating for fear the program's rules will
change in a political atmosphere hostile to Wall Street, the
Journal reported. It also said that some banks that might have
sold troubled loans into the program earlier in the year have
become less eager as they regained a sense of stability.
FDIC spokesmen were not immediately available for comment.
(Reporting by Yinka Adegoke; Editing by Gary Hill)
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