Americas Backs Infrastructure Bank Funded By U.S

WASHINGTON, Sept 21 (Reuters) - UBS Americas (UBSN.VX) (UBS.N) threw support behind the Obama administration's proposal for a U.S. infrastructure bank on Tuesday, but warned against creating a quasi-government agency like housing finance enterprises Fannie Mae and Freddie Mac.

"Creating a national infrastructure bank is an idea whose time has come," Robert Wolf, chief executive of UBS Americas, told a Senate Banking Committee hearing called to explore alternatives for financing infrastructure projects.

Wolf said Congress should establish an institution that would leverage private investment to finance transportation and other big-ticket projects like rail, road, water, broadband or airport upgrades.

He recommended that it not have private shareholders. Rather, Wolf said, it should be capitalized through the U.S. Treasury to avoid the problems experienced by hybrids Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) that were held by private shareholders but benefited from government sponsorship.

Fannie and Freddie were seized by Treasury two years ago after losses during the U.S. housing market collapse and recession. Taxpayers have poured $150 billion into the lenders to keep them afloat.

Obama proposed a $50 billion infrastructure spending program earlier this month to rev up the economy and create jobs. The bank, Obama said, could be one way of financing the highest-priority projects through grants and loans. Wolf favors a loan-focused arm.

Obama envisions creating the bank as part of long-term infrastructure spending legislation expected to take shape in 2011. Presidential advisers have suggested capitalizing the bank at $25 billion.