The Federal Deposit Insurance Corp. (FDIC) yesterday morning issued an interim rule to extend to March 31, 2010 the safe harbor rule related to its treatment as conservator or receiver of financial assets transferred by an insured depository institution in connection with a securitization.

The market welcomed FDIC's move. "We view the FDIC's extension of the safe harbor rule and supportive comments regarding the ABS markets as positive first steps in resolving the issues related to the potential loss of legal isolation due to the adoption of FAS 166 (GAAP standards for transfers, including securitizations, of financial assets)," Bank of America Merrill Lynch analysts wrote.

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