US Treasury Secretary Geithner to unveil details of finance rescue
Washington - US Treasury Secretary Tim Geithner plans to unveil later Monday details of a public-private investment programme that will mop up toxic assets and build new capital for banks to help recover from the financial crisis.
Anticipation of the announcement already sent Asian markets on the upswing as they opened Monday morning.
Geithner is expected to provide many of the details that investors were looking for when he gave the broad outline of the Obama administration's rescue plan some weeks ago.
The three-pronged programme is to create a series of public- private investments to mop up 500 billion to 1 trillion dollars in troubled loans and securities that are at the heart of the global financial credit freeze, the Wall Street Journal reported online.
Geithner revealed the details in an interview with the newspaper, saying that the government cannot fix the financial crisis alone.
"Our judgment is that the best way to get through this is if we can work with the markets. We don't want the government to assume all the risk. We want the private sector to work with us," he was quoted as saying.
The US government plans to subsidise some of the private investments and take on much of the risk, the Journal reported.
According to a press release about Monday's announcement, other key parts of the programme will include:
- A new capital program to provide banks with a safeguard against a deeper recession.
- A major new lending program with the Federal Reserve that will expand credit for consumers and create new "asset classes" for investment in the loans.
- A programme to encourage lower mortgage rates and refinancing to avoid foreclosures.
- A special programme to support small business loans by "directly purchasing securities backed by Small Business Administration loans." (dpa)