Canada says US bank fund may ease market pressure

OTTAWA (Reuters) - Canada welcomed on Monday an initiative by major banks in the United States to set up an investment fund to buy troubled loan products, saying it could ease some of the pressure in the structured asset markets.

"Early indications are that the plan may reduce selling pressure on structured asset markets and thereby limit the need for financial institutions to recognize mark-to-market losses and potentially reduce the availability of credit," an official from the Department of Finance said.

The official said the terms of participation in the fund were not yet clear, nor was it clear how it would affect Canadian players.