Treasury
Secretary Tim Geithner will announce a plan early next week to relieve
failing banks of their toxic assets by attracting back private
investors rather than have the government buy up all the risk,
according to officials familiar with the plan.
Private investors, including hedge funds, will be able to bid on the
assets using a pool of capital from the investors and the government,
with taxpayers sharing in profits or losses.
The plan uses up to $100 billion of taxpayer funds to leverage up to $1 trillion in private capital, the officials said.
“We’re creating a market, not bailing out banks,” said an official
briefed on the plan. “Because we’re creating a market, we’re letting
the private sector set the price, which will likely be below purchase
price but
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