Backgrounder on the Treasury Department's Public-Private Investment Program

Backgrounder on the Treasury Department's Public-Private Investment Program


This backgrounder briefly describes the U.S. Treasury Department's latest plan for dealing with the banking and financial crisis, the Public-Private Investment Program. It states in part:
 
     On March 23, the U.S. Treasury Department outlined its latest plan for dealing with the banking and financial crisis. The Public-Private Investment Program aims to clear financial firms of legacy assets -- assets created prior to 2009 that are burdening banks and affecting their ability to extend credit. By moving these assets off the books of financial institutions, the Treasury hopes to increase the flow of credit and expand liquidity. Legacy assets are divided into two classes: (1) legacy loans which are real estate loans held directly by banks, and (2) legacy securities which are securities backed by loan portfolios. The Public-Private Investment Program will set up funds to provide a market for legacy loans and securities.
 

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