“Banks will not be allowed to buy their own assets,” through the PPIP, said Joseph Jiampietro of the FDIC, speaking at a SIFMA-PREA conference in NYC and noting that there has been some confusion around this issue. Also, he said the FDIC met with several pension funds and mutual funds and generally there was a sense that investors and banks were “reluctant” to participate if TARP funds were involved. James Wigand of the FDIC said investors did not want to subject themselves to the risk of legislation if they used government funds.

The Bank of Canada says that in recent weeks, financial conditions and commodity prices have improved significantly, and consumer and business confidence have recovered modestly. But it adds that “If the unprecedentedly rapid rise in the Canadian dollar (which reflects a combination of higher commodity prices and generalized weakness in the U.S. currency) proves persistent, it could fully offset these positive factors.”

Global emerging market equity funds absorbed $3.79 billion in week to June 3 vs just over $2 billion in previous week, says fund tracker EPFR Global. Notes investors put more cash in emerging markets, commodities, energy, following broad weakness of safe-haven USD, JPY. Adds higher risk appetite eyed in $22.7 billion being pulled out from money market funds to look for higher yields, also $1.1 billion being pumped into global bond funds – largest weekly inflows since 4Q of 2004. Says U.S., Japan, Europe equity funds had outflows on concerns over weak domestic demand. Notes global emerging market equity funds have taken $26.1 billion net inflows year-to-date vs $50 billion net outflows for whole of 2008