Five U.S. financial industry trade associations Friday unveiled an industry survey that examines more than 400 firms’ views of participation in the U.S. bank bailout program known as the Troubled Asset Relief Program.

The survey was sent to members of Securities Industry and Financial Markets Association, American Securitization Forum, American Bankers Association, Mortgage Bankers Association and Commercial Mortgage Securities Association and provides insights into how financial organizations of all sizes assess and evaluate potential TARP participation.

It found:

> large firms are more likely to participate;

> institutions would prioritize the purchase of subprime and Alt-A residential real estate, followed by commercial real estate, particularly for smaller institutions;

> firms believe whole loans and securities should get roughly equal priority;

> firms disclosed that 50-60% of their assets are residential related;

> institutions would sell approximately 50% of their assets targeted for TARP at a slight discount to model-based valuations (or current book value if marked to market) but small institutions would require prices closer to cost;

> small institutions are more concerned about uncertainty over future realized losses and large institutions about illiquidity premium;

> in addition to commercial real estate, smaller institutions identified other real estate, and larger institutions identified corporate loans and collateralized debt obligations as having the greatest illiquidity premium and would be the most beneficial to their institutions if purchased by TARP.

“The industry needed more granular, tangible information on how TARP implementation could be most effective, and this survey provides that guidance to our industry and to policymakers. Given the breadth of the markets, this survey provides some meaningful direction on where regulators’ tools might be targeted to be most effective, particularly as it relates to providing price transparency,” said Tim Ryan, president and CEO of the SIFMA.

IE