The US will today make public details of a $500bn (£343bn) plan that will incentivise investors to buy up toxic assets. The plan will offer subsidies to private investors to encourage them to buy troubled mortgages and other loans. Essentially, these subsidies are low-interest loans.
The US Treasury Secretary Timothy Geithner said the programme is essential to help the world markets recover.
The "Public-Private Investment Programme" will buy toxic mortgages, securities and loans from banks. Initially the programme will free-up $500bn but the Treasury has made it clear the fund could stretch up to $1 trillion.
He also alluded to one of the very significant hurdles to a global economic recovery: the fact that banks are unwilling to free up credit to potential investors because they are still reeling from toxic debt losses. He pointed out that the private sector would share the burden of toxic assets with the taxpayer.
Generally, the news has been well received and it's expected that the markets will react positively as further details are announced today
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