The Securities Industry and Financial Markets Association says that it is disappointed that the U.S. Treasury is abandoning the original purpose of its bailout plan, the buyout of troubled mortgage-backed securities.

Tim Ryan, president and CEO of the SIFMA released a statement Wednesday after U.S. Treasury Secretary Henry Paulson spoke on the TARP program today, indicating that it is moving away from the original plan to buy troubled assets, and will focus on recapitalization instead.

“I am disappointed Treasury is choosing to de-emphasize the asset purchase portion of the TARP program,” Ryan said. “Based on my experience with the Resolution Trust Corporation, I believe a key ingredient to a strong recovery is the creation of price discovery through some type of transparent purchase program. Until we have a functioning marketplace — where buyers and sellers agree on prices and institutions can subsequently judge the value of the assets they hold — uncertainty could keep many financial players on the sidelines, restricting lending capital for the larger economy. Treasury is uniquely positioned to bring these buyers and sellers together.”

However, he noted that “Paulson has a comprehensive understanding of the serious challenges facing our nation,” and that its efforts “will help stabilize our economy, especially the efforts to inject capital into financial institutions and on securitization.”

“Securitization is a critical engine of today’s economy, making available additional capital for borrowers. The recent turmoil has stalled large parts of this market and restarting it will help ensure consumers get the loans they need for homes, cars and education,” he added.

“Understandably, Treasury has both limited time and resources and must make hard choices. But as we move forward, and in planning for the next administration, we hope there will be further opportunities to comprehensively revisit this important program,” Ryan concluded.