US 'toxic asset' purchases to begin within 6 weeks
A public-private investment program designed to buy up "toxic assets" clogging the US banking system will begin operating within six weeks, Treasury Secretary Timothy Geithner said Wednesday.
By Agencies |
WASHINGTON: A public-private investment program designed to buy up "toxic assets" clogging the US banking system will begin operating within six weeks, Treasury Secretary Timothy Geithner said Wednesday.
Geithner told a congressional hearing that Treasury officials are in the process of selecting fund managers from more than 100 applications.
"Treasury is evaluating a select group of finalists and will inform applicants of their preliminary qualifications in the next several weeks," he told members of the Senate Banking Committee.
"Working with the Federal Reserve and the FDIC (Federal Deposit Insurance Corp), we expect these programs to begin operating over the next six weeks."
The program was announced March by the administration of President Barack Obama to buy up assets from soured real estate investments that remain on bank balance sheets, making it difficult for the institutions to expand lending.
The "Public-Private Investment Program for Legacy Assets" (PPIP) is funded with 75 to 100 billion dollars from the government. It also will offer loans to investors and guarantees to attract private capital.
The program aims to help banks sell toxic assets -- mainly mortgage-related securities that cannot be sold because of a frozen market in the wake of a collapse of the US real estate market.
The program is aimed at getting these assets off the balance sheets of banks, enabling them to boost other lending to fuel economic activity and ease a severe recession.
Geithner told a congressional hearing that Treasury officials are in the process of selecting fund managers from more than 100 applications.
"Treasury is evaluating a select group of finalists and will inform applicants of their preliminary qualifications in the next several weeks," he told members of the Senate Banking Committee.
"Working with the Federal Reserve and the FDIC (Federal Deposit Insurance Corp), we expect these programs to begin operating over the next six weeks."
The program was announced March by the administration of President Barack Obama to buy up assets from soured real estate investments that remain on bank balance sheets, making it difficult for the institutions to expand lending.
The "Public-Private Investment Program for Legacy Assets" (PPIP) is funded with 75 to 100 billion dollars from the government. It also will offer loans to investors and guarantees to attract private capital.
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The program aims to help banks sell toxic assets -- mainly mortgage-related securities that cannot be sold because of a frozen market in the wake of a collapse of the US real estate market.
The program is aimed at getting these assets off the balance sheets of banks, enabling them to boost other lending to fuel economic activity and ease a severe recession.
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