Brilliant..how to work the TARP

From the nytimes:

The Swiss National Bank said it had created a fund that would enable UBS to transfer $60 billion worth of toxic assets from its balance sheet. UBS said the fund would be capitalized with $6 billion of equity capital provided by UBS and $54 billion from the Swiss National Bank.

UBS said in a statement: “With this transaction, UBS caps future potential losses from these assets, secures their long-term funding, reduces its risk-weighted assets and materially de-risks and reduces its balance sheet.”

This drew a big aha from me. Now I have an idea of how to work the TARP (Troubled Asset Relief Program) with the remaining $500B. Set up a fund that will be capitalized with 10% from the bank (from the earlier govt. infusion of cash :o) that holds the asset and 90% from the govt. Move the toxic asset into the fund at the most recent mark to market value. That's it..the bank is done and they limit their losses and so get some certainty (which helps them calculate value-at-risk, etc.). And now the biggie...any losses < 10% will effectively be borne by the bank earlier held those assets. Sounds like something workable.