The US Treasury on Monday, March 23, 2009 revealed details of a highly-anticipated plan to set up public-private investment funds that will buy up to $1 trillion in troubled loans and securities at the heart of the financial crisis.

The Treasury’s complex plan to use private funds to purchase toxic assets uses low-cost government financing, government guarantees and government equity as incentives.

The plan has two programs—one to purchase securities, the other to purchase loans from banks. Troubled real estate-related assets, comprised of legacy loans and securities, are at the center of the problems currently impacting the U.S. financial system.

The Financial Stability Plan, announced on February 10, 2009, outlined a broad approach to address this issue via the formation of Public-Private Investment Funds (“PPIFs”).  

Today Treasury announcied the Public-Private Investment Program (PPIF) under which it will make targeted investments in multiple PPIFs that will purchase legacy real estate-related assets.

Addressing the problems created by legacy assets is intended to help to improve the health of the financial institutions where they are held, leading to an increased flow of credit throughout the economy, and helping improve market functioning in the near-term.  

Investments made by Treasury under the Public-Private Investment Program are intended to complement the other components of the Financial Stability Plan that have been announced, including:

• Capital Assistance Program,

• Homeowner Affordability and Stability Plan, and

• Consumer and Business Lending Initiative,

• Continuing the Obama Administration’s efforts to improve the stability and functioning of the financial system.

Check out the details — and the devil, if you will — of all the programs:

NEW: Public Private Investment Program (PPIP)

Fact Sheet

White Paper

Legacy Securities Summary of TermsLegacy Securities FAQs Legacy Loans FAQs

Unlocking Credit for Small Businesses

Fact Sheet

Q&A for Small Businesses

Secretary Geithner’s Remarks  

Counselor Q&A

Consumer and Business Lending Initiative (TALF)To view TALF Term Sheet and FAQ, visit: http://www.federalreserve.gov/newsevents/default.htmWhite Paper

Capital Assistance Program (CAP)

CAP White Paper CAP Term Sheet

CAP FAQs Application Guidelines for CAP

 CPP Guidelines Under the American Recovery and Reinvestment Act

Tags: Public Private Investment Funds

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