Deutsche in "constructive dialogue" on M-LEC

LONDON (Reuters) - Deutsche Bank AG (DBKGn.DE) is still in constructive dialogue with other banks over support for a superfund to help restore confidence in distressed structured investment vehicles, the chief executive of Germany's biggest bank said at the Reuters Finance Summit.

When asked on Thursday whether Deutsche supported the launch of the fund, Ackermann said: "We are in constructive dialogue."

"If it's a market-based approach and a transparent approach, then I think there is some value," he added.

Encouraged by the U.S. Treasury, Citigroup (C.N), Bank of America (BAC.N) and JP Morgan Chase (JPM.N) said in October they would set up a fund, called Master Liquidity Enhancement Conduit, or M-LEC, to help the ailing structured investment vehicles (SIVs), but few details have emerged.

Doubts about whether other major global banks like Deutsche would join the initiative and criticism about the effectiveness of the plan from the likes of former U.S. Federal Reserve chairman Alan Greenspan have cast questions over its launch.

Investors have become anxious that if the proposed fund is aborted, it will hasten the wind-up of many SIVs that have been locked out of short-term financing markets since the credit squeeze hit in August.

The fear is that a subsequent firesale of their top-rated assets could depress the value of those assets still further for everyone holding them, and that may force banks into further steep debt writedowns during the fourth quarter.

Ackermann said that as chairman of global bank association the Institute for International Finance, it was difficult for him to say very much about the fund beyond what the IIF had agreed to say in Washington last month.

"I think I have to stick to the statement I made at the press conference in Washington, which was coordinated with all the people involved including the U.S. Treasury," he said.

"It's still premature to assess the superfund in its impact but we welcome any private market initiative which helps to stabilize the market," he said, paraphrasing the October statement.

(Reporting by Mike Dolan; Editing by Quentin Bryar)