Sources say toxic asset plan near completion
One program will use the bailout fund to create a public-private partnership to back purchases of bad assets by private investors.
A second portion of the plan will expand a recently launched program being run by the Federal Reserve called the Term Asset-Backed Securities Loan Facility, or TALF.
That program is providing loans for investors (who are these people?) to buy assets backed by consumer debt in an effort to make it easier for consumers to get auto, student and credit card loans.
Under Geithner's proposal, this program would be expanded to support investors' purchases of banks' toxic assets.
The third part of the Geithner plan would utilize the resources of the FDIC, the agency that guarantees bank deposits, to purchase toxic assets.
Geithner's new plan would tap the resources of the Fed and the FDIC to attack what many analysts see as the major failing of the bank rescue effort so far, the failure to rid banks' of more than $1 trillion in bad loans and other toxic assets weighing down their books.
As a result, banks have been unable to shake off the effects of the worst financial crisis to hit the country in seven decades.
The effort to deal with toxic assets is the latest in a string of initiatives the administration has put forward to deal with the financial crisis that had made it hard for consumers and businesses to get loans and has deepened the current recession, already the longest in a quarter-century. - AP
http://biz.thestar.com.my/news/story.asp?file=/2009/3/21/business/20090321104548&sec=business
A second portion of the plan will expand a recently launched program being run by the Federal Reserve called the Term Asset-Backed Securities Loan Facility, or TALF.
That program is providing loans for investors (who are these people?) to buy assets backed by consumer debt in an effort to make it easier for consumers to get auto, student and credit card loans.
Under Geithner's proposal, this program would be expanded to support investors' purchases of banks' toxic assets.
The third part of the Geithner plan would utilize the resources of the FDIC, the agency that guarantees bank deposits, to purchase toxic assets.
Geithner's new plan would tap the resources of the Fed and the FDIC to attack what many analysts see as the major failing of the bank rescue effort so far, the failure to rid banks' of more than $1 trillion in bad loans and other toxic assets weighing down their books.
As a result, banks have been unable to shake off the effects of the worst financial crisis to hit the country in seven decades.
The effort to deal with toxic assets is the latest in a string of initiatives the administration has put forward to deal with the financial crisis that had made it hard for consumers and businesses to get loans and has deepened the current recession, already the longest in a quarter-century. - AP
http://biz.thestar.com.my/news/story.asp?file=/2009/3/21/business/20090321104548&sec=business
