US Treasury says bank 'superfund' will broaden

WASHINGTON, Oct 20 (Reuters) - More participants will join a credit rescue plan that three lead banks are setting up to help stabilize the asset-backed commercial paper market, but it will be temporary, a senior U.S. treasury official said on Saturday.

In prepared remarks for delivery to a panel session at the International Institute of Finance, Treasury's under secretary for domestic finance, Robert Steel, said Treasury had closely consulted U.S. and international regulators while it facilitated the banks' organization of the fund.

Its purpose is to help structured investment vehicles, or SIVs, avoid being forced into dumping mortgage assets that they hold at firesale prices by giving them a chance, for a fee, to offer them to a "superfund" set up by the banks.

"The structure they are developing is expected to be temporary and will serve as a bridge, which will provide time for participating SIVs to restructure in a more orderly fashion," Steel said.