March 22nd, 2009
01:00 PM ET
5 years ago

CNNMoney: Administration to unveil bank clean-up plan

The Obama adminstration is expected to unveil plans for public-private partnerships intended to help some of the nation's banks deal more effectively with bad assets.
The Obama adminstration is expected to unveil plans for public-private partnerships intended to help some of the nation's banks deal more effectively with bad assets.

NEW YORK (CNNMoney.com) - The Obama administration on Monday will unveil a program to help banks clean up their books by purchasing their bad assets.

The effort marks the next big step in Washington's six-month-old bank rescue, which has so far mostly entailed making capital investments in exchange for stock shares and insuring bank obligations.

Investors have been waiting expectantly for details since last month when Treasury Secretary Tim Geithner announced the framework of a plan to address two of the biggest problems in the banking sector: the toxic assets keeping banks from lending and the shortage of capital at major institutions.

At the time, Geithner pledged to raise as much as $500 billion from public and private sources to relieve banks of toxic assets. But he didn't explain how the program would bring together buyers and sellers who have been locked in a stalemate for 18 months.

Under the plan being considered, taxpayer funds will be used to effectively seed partnerships with private firms to buy up assets backed by mortgages and other loans.

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Filed under: Obama administration • TARP • Tim Geithner
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