WASHINGTON (CNNMoney.com) - The Treasury Department unveiled its long-awaited plan to remove many of the troubled assets from banks' books Monday, representing one of the biggest efforts by the U.S. government yet to tackle the ongoing financial crisis.
Under the new so-called "Public-Private Investment Program", taxpayer funds will be used to seed partnerships with private investors that will buy up so-called toxic assets backed by mortgages and other loans.
The goal is to buy up at least $500 billion of bad assets - such as subprime mortgages that are now in danger of default. Doing so would help cleanse the balance sheets of many of the nation's largest banks, which continue to suffer billions of dollars in losses.
The government will then run auctions between the banks selling the assets and the investors buying them, hoping to effectively create a market for these assets.
Could the toxic asset bailout backfire? CNN Radio's Bob Costantini takes a closer look.
To kickstart things, the administration said it will commit $75 billion to $100 billion and would consider how the program is progressing before committing more money.