Stress tests are looking more appealing after the reassurances Federal Reserve Chairman Ben Bernanke offered yesterday during his testimony before the Senate Banking Committee, but there are still plenty of observers out there hoping the government´s rescue plan will move more quickly. Among the suggestions for improving the plan are quicker disposal of toxic assets; clearer, more detailed announcements; and changes to accounting rules.

Sources American Banker talked to yesterday disagreed on the best way to clean up toxic assets on banks´ balance sheets. Some suggested using the Federal Deposit Insurance Corp. to set up bridge banks and resolve the unhealthiest of institutions. Their suggestions contrasted with the views of former FDIC Chairman William Isaac, whose op-ed in the Wall Street Journal criticized the idea of an FDIC intervention.

But another former FDIC head thought the method could work for at least some of the banks.

L. William Seidman said using bridge banks was just one solution to the problem.

"I agree that it wouldn´t work to make them all bridge banks," he said. "But that doesn´t mean that for some of them that wouldn´t be the best solution."

To Mr. Isaac´s criticism that using bridge banks would mean breaking up the biggest banks in the country at the wrong time, Mr. Seidman responded that shrinking mega-banks may be the right way to go. "Do we really want to break down the biggest banks right now? Yes we do," he said.

But wiping bad assets from banks´ books wouldn´t be top on his list of priorities. "I´d say the best thing you could do for the banks right now would be to get the securitization market going," he said. "Most of the banks don´t hold these loans. Whether they´re credit cards, student loans, or housing loans-whatever-there is no securitization market."

Mr. Seidman said rebooting the securitization market wouldn´t be easy, and no one had quite figured out how to accomplish it.

"I´m looking for a long-term solution that will set up a vehicle to insure that we have a securitization market and I think that requires an insurance-type operation somewhat like what the government does through the FDIC," he said. "It would simply take securitizations, and the securitizer would buy insurance on the securitization and the insurance fund would be reinsured by the government, and then people would buy it. Right now they won´t buy any securitizations, good bad or other, because they got burned."

Mr. Seidman added that rescuing banks was a Herculean task. "I´m so happy that I´m not charged with fixing this thing," he said. "This is a tough assignment. It involves not only subprime and all that, it involves the fundamental fact that we´ve been living beyond our means for the last ten years."