WASHINGTON (CNN) - Partnerships with the private sector - aimed at restoring the flow of credit to families and businesses– will be a key feature of an overhaul of the $700 billion financial bailout to be announced by Treasury Secretary Tim Geithner on Tuesday morning, according to a senior White House official.
The public-private par are expected to buy troubled assets that now clog banks' balance sheets and to provide incentives so banks will start lending again, the official said.
The plan will continue to rely heavily on companies injecting capital into banks, but it will require more from those companies, such as caps on executive compensation. The government also will boost monitoring to make sure those banks use the money to increase lending, the official said. The bailout, launched by the Bush administration, has come under fire for its lack of transparency.
The plan also will commit up to $100 billion of the program's remaining $350 billion to stem the tide of foreclosures, without seeking more money from Congress at this time, the official added.
The official also said the plan will significantly expand a Federal Reserve program aimed at unclogging lending to consumers and small businesses by widening the program to cover other types of loans, such as those for commercial real estate.