US details toxic asset programme

US details toxic asset programme

(Source BBC)
Mr Geithner said the plan would be better for taxpayers
The US is set to announce details of a $500bn (£343bn) plan to encourage investors to buy up toxic assets.
The plan will offer subsidies in the form of low-interest loans to private investors to encourage them to buy troubled mortgages and other loans.
Writing in the Wall Street Journal, US Treasury Secretary Timothy Geithner said the measures were needed to help the financial system recover.
The plan is due to be formally launched later on Monday.
The "Public-Private Investment Programme" will purchase the troubled mortgages and securities that have been at the root of the credit crisis from banks.

Business / Economy
U.S. Rounding Up Investors to Buy Bad Assets (NY Times Permalink)
By ANDREW ROSS SORKIN, ERIC DASH and RACHEL L. SWARNS
Published: March 23, 2009
A day before unveiling the government’s plan to buy troubled assets, the Obama administration worked to persuade private investors to participate.

Geithner Banks on Private Cash (Source WSJ)
Treasury Secretary Says Investors Needed to Help U.S. Rid Balance Sheets of Bad Assets

WASHINGTON -- Treasury Secretary Timothy Geithner said the only way to remove troubled assets clogging banks' balance sheets -- which lie at the heart of the financial crisis -- is to work with the private sector, even at a time when Wall Street moneymakers are being vilified by the public and politicians.
In an interview with The Wall Street Journal Sunday, Mr. Geithner said the government cannot fix the financial crisis alone. "Our judgment is that the best way to get through this is if we can work with the markets," he said. "We don't want the government to assume all the risk. We want the private sector to work with us."

My Plan for Bad Bank Assets (Source Financial Times)
The private sector will set prices. Taxpayers will share in any upside.

The American economy and much of the world now face extraordinary challenges, and confronting these challenges will continue to require extraordinary actions.
No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk. Those decisions have caused enormous suffering, and much of the damage has fallen on ordinary Americans and small-business owners who were careful and responsible. This is fundamentally unfair, and Americans are justifiably angry and frustrated.
http://online.wsj.com/article/SB123776536222709061.html

Mr Geithner is due to give a briefing on the plan at 8.45 a.m. (1245 GMT) Monday, March 23