Banks may have to pool their troubled mortgage assets into giant special resolution vehicles in order to ring-fence past problems and help to restart the financial markets, some central bankers believe, writes Krishna Guha in Jackson Hole.

Such vehicles would be similar to the aborted "super-SIV" proposed by some US banks with Treasury backing last year. Governments could provide financial support if needed in return for a share in potential profits once the assets were liquidated. Thisoption was one of several ideas in the air at the Jackson Hole symposium hosted by the Federal Reserve Bank of Kansas City. Most of the policymakers present believe that market pricing of US mortgage-backed securities is far too low based on likely cash flow losses - and that this reflects an extreme liquidity risk premium.