US rescue plans may slow pricing of troubled assets

By Pedro Nicolaci da Costa

NEW YORK, Nov 10 (Reuters) - The U.S. government's emergency investments in the financial sector may actually slow the day of reckoning for mortgage losses, a panel of bankers said on Monday.

Investors at an industry conference agreed that the $250 billion in bank capital injections, part of a broader $700 billion bailout plan, was necessary to restore confidence in battered credit markets in the near term.

However, the very presence of government cash, when coupled with a lack of clarity on when Treasury might actually make outright purchases of troubled assets, could mean the crisis will linger even longer, analysts said.

"The presence of the capital infusion actually delays that process," said Jeffrey Rosenberg, head of credit strategy research at Bank of America Securities.

The conference was sponsored by the Securities Industry and Financial Markets Association, and was aimed at clearing up confusion about the extent and nature of government involvement in bailing out the nation's crumbling banks.

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Jan Hatzius, chief U.S. economist at Goldman Sachs, said global credit losses from the crisis would eventually total $1.4 trillion, of which only $800 billion have been realized to date.

Worse yet, noted RBC managing director Gerard Cassidy, losses in the commercial real estate and leveraged loan sectors have only begun to scratch the surface.