US: Treasury unveils public-private plan for toxic assets
24 Mar 2009 12:44 AM
The US Treasury has unveiled its long-awaited plan to buy up toxic assets clogging the financial system .. using government funds and Federal Reserve backing to attract private capital.
The cornerstone of the plan is a Public-Private Investment Program for Legacy Assets .. funded with $US75 billion to $US100 billion ($A108.8 billion to $A145 billion) from the government .. an idea that has generated some praise but also scepticism.
Officials say this approach will generate $US500 billion ($A725 billion) in purchasing power .. and could expand to $US1 trillion ($A1.45 trillion).
The plan .. the outlines of which were unveiled last month .. is a key to helping the ailing banking system recover from massive losses suffered in the US real estate meltdown and stabilising the economy.
The Treasury says the plan ensures that private sector participants invest alongside the taxpayer .. with the private sector investors standing to lose their entire investment in a downside scenario .. and the taxpayer sharing in profitable returns.
AAP RTV rs/psm/
