Private funds may be used for Treasury bailout
Treasury Secretary Timothy Geithner may introduce private funding as one component of his bank bailout plan to help institutions deal with the bad debt weighing on their balance sheets.
It can't be all private capital, but with the right kinds of government guarantees and the right kinds of financing, strategic approaches. [Treasury Secretary Timothy] Geithner believes we can bring in substantial private capital, said one of Obama's chief economic advisors, Lawrence Summers, on Fox News Sunday.
Treasury is also considering a so-called bad bank or aggregator bank that would buy the assets, many of which are illiquid mortgage securities.
In addition to guaranteeing mortgage securities, the plans may provide new capital injections into financial institutions and help out troubled homeowners on the verge of foreclosure. The government may also expand an already existing consumer lending program.
The plan is basically intact, done but there are minor tweaks happening. We are ready to announce what we believe is a comprehensive, forward-looking plan tomorrow, a Treasury spokesperson told reporters, according to Bloomberg.
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