NJBIZ is reporting that New Jersey Bankers are faintly praising the latest federal plan to help eliminate banks' toxic assets.

".......................New Jersey, who applauded efforts to clean up bankers’ balance sheets, but warned that the bailout may ignore important underlying issues."

Federal agencies will use private and public funds to acquire or otherwise liquidate “legacy loans and assets that are now burdening many financial institutions,” according to today’s announcement by Treasury Secretary Timothy Geithner.

Removing banks’ troubled assets “may give confidence to financial markets and free up lending,” said James Silkensen, co-chief executive officer of the New Jersey Bankers Association. “But it’s important to be sure that the assets are valued properly.”

He said he was encouraged by Geithner’s promise “to use private capital and private asset managers to help provide a market mechanism for valuing the assets.”

But the announcement “was short on detail,” said Christopher Martin, president and chief operating officer of The Provident Bank, based in Jersey City. “The government is looking for a quick solution to this problem, but there is no quick solution.”

Part of the problem, he said, is that today’s Treasury statement did not appear to address mark-to-market accounting rules that have driven large paper losses at banks.

“Before federal agencies take the troubled assets off banks’ balance sheets, they should be sure the assets are valued properly,” Martin said.