Details For Toxic Asset Plan On The Way

  • Playlist
  • Download
  • Embed
    <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

The Obama administration has developed a detailed plan for removing toxic mortgage-backed securities from the nation's banks and financial institutions and may unveil it early next week.

The plan expands on the idea of public-private partnerships that Treasury Secretary Timothy Geithner introduced in February when he unveiled the administration's financial stability plan.

Then, investors were disappointed by the lack of detail. Now, sources say, the plan will be three-pronged and involve the Treasury, the Federal Reserve and the Federal Deposit Insurance Corp., along with private investors.

The government will put up the vast majority of about a trillion dollars to buy toxic assets. But the funds will be largely in the form of loans and not require further appropriations, which Congress is in no mood to give.

In addition, the Treasury will hire private management firms to buy up toxic assets, with both sides putting in equal amounts of equity, but with taxpayers shouldering most of the risk.



Please keep your community civil. All comments must follow the Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

NPR thanks our sponsors

Become an NPR sponsor

Support comes from