Private investors and the government would work together to buy bad assets to help financial institutions get back on their feet, under a plan unveiled today by Treasury Secretary Timothy Geithner.
The government will offer low-interest loans to private funds wanting to buy these assets-loans and mortgage-backed securities-to encourage funds to buy assets. Private equity firms and hedge funds are likely to be the main purchasers of these assets.
Geithner said the government would offer initially offer $500 billion in loans and eventually might offer up to $1 trillion.
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